The declining strength of the pound has become even more apparent over the last few days as the country has watched it’s worth drop against the dollar.  The pound has fallen to close to a 23 year low, standing at $1.3915 for every pound and 1.0688 Euros for every pound.

Compared to last summer, the figures are appalling as the pound was worth over $2 just around 14 months ago.  The pound was at a 15 year low yesterday however hitting $1.3620 but bounced back slightly after news surfaced that the topic of the pound would be discussed by the G7 in February.

The chief economist at Saxo Bank, David Karsbol, discusses how the news is effectively bad for the country, saying,  “Although a lower pound makes exports more competitive, it’s not all good news as it leads to higher import prices.  Because the UK is a net importer of goods, that naturally leads to higher inflation (or lower deflation), reducing the purchasing power of UK consumers.”

The news of the dropping rate of the pound has proved that the recent news of the government’s second bank bail out scheme has failed to impress investors.  Currency traders are now working fast to sell their sterling, as they believe that the government’s next move will be to pull the country’s interest rate closer to nothing to invigorate the country’s economy.  The Bank of England recently lowered the interest rate down to 1.5 per cent, the lowest the interest rate has been in the history of the Bank of England.

There are also issues around the possibility of the government nationalising banks in Britain, demoting the country’s debt rating.

The level of mortgage lending in Britain also fell recently, dropping 30 per cent through 2008, showing the lowest level of mortgage lending the country has seen since 2002.  To make matters worse news has surfaced today that home repossessions have risen 92 per cent in the three months leading up to September compared to the same time period of time in 2007.

13,161 homes were repossessed in the months, leaving families around the country with nothing.  The chief executive of the Homeowner Mortgage Support Scheme, Adam Sampson, announced that the government were focusing too much on the banks and has left thousands of households around the country helpless.

“While the government yet again bails out some of Britain’s floundering banks with billions of pounds, it is still seemingly unable to provide adequate support for millions of hard-working homeowners.  These new figures are not just numbers, they are heartbreaking tales of real people losing their homes,” said Sampson.

Unemployment is also adding to the woes of the country as the figure of unemployed people in Britain is edging closer and closer to the 2 million mark.  The government is expected to announce that the country is officially in a recession tomorrow, although many are have been feeling the effects of the recession for months.

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