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Sterling falls to new lows as recession is confirmed

The UK currency has fallen to its lowest level since 1985 after the confirmation that the UK is technically in recession. It seems as though investors in the currency markets and investors in the stock market are running scared with nobody quite certain how low the economy can go and how quickly it can bounce back. The situation has been exacerbated by the Treasury's refusal to clarify the exact maximum liability which UK taxpayers have in relation to the recently announced bank bailout part two.

There is concern that the government is not able to clarify the maximum liability which has spooked many investors who believe the liability could potentially be enormous. Until the government is able to at least suggest a top figure if the scheme was to go wrong it is highly unlikely that the currency or the stock market will become the focal point of both domestic and international investors. Talk that UK interest rates may also fall to around 0% have also impacted upon the direction of the currency and stock market although there have been signs of late that some savers are placing their money back into the market after savings rates collapsed.

There is real concern regarding the UK currency and there are strong rumours that the UK government is considering joining the euro.

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