The pound dropped to its weakest value in more than two years versus the dollar this morning (September 1st), on the back of a gloomy assessment by Chancellor Alistair Darling.
The UK currency also stumbled to a record low versus the euro after Chancellor Darling indicated that the country’s economic downturn could be the worst for 60 years.
The value of the UK currency fell by more than one per cent to as low as $1.8005, its weakest position since April 2006 after the Chancellor made the comments in the weekend edition of the Guardian.
Gerrard Katz, head of north Asia FX trading at Standard Chartered, said: "There was a lot of weekend press about how bad the UK economy is at the moment, so that’s weighing on the market."
The pound later made a small recuperation when it cut losses to 0.9 per cent up to $1.8047.
A European trader told Reuters: "It is hard to buy the pound, and the dollar is favoured comparatively as a result."
The current exchange rate at 09:35 BST is £1.00 to $1.8044.