Sterling weakens against the dollar

Holidaymakers heading to the United States could face disappointment, as the pound has continued to weaken against the dollar, having slipped to around $1.85. Just weeks ago consumers could get close to $2 for every pound, but gloomy assessments of the UK economy have resulted in the pound continuing to weaken against the dollar.

In fact, the pound has faced the longest run of losses in thirty seven years according to recent reports. The dollar has now strengthened against both the pound and the Euro, having hit a six month high against the Euro, with the Euro trading at $1.4695.

Tim Clayton, chief strategist at currency advisory consultancy Investica, said: “The US was the first economy to hit trouble. Now people are realising that the UK has the same problems, if not more so, as the US.” Holidaymakers to the US will see a sharp drop in the amount they get per pound, and one official said: “The US is still cheap, it’s still a good holiday, but it’s got a lot more expensive”

The pound against the dollar fell sharply on Wednesday, and this was after a gloomy forecast from the governor of the Bank of England, Mervyn King, who said that inflation could hit 5% before the end of the year and that growth was likely to remain flat for the next year.