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Pound drops amid concerns about strength of UK economy

By: The Associated Press

Friday, Mar. 1, 2013 at 10:38 AM | Comments: 0

The reflection of a pedestrian seen in the window, with a sign at a money exchange bureau, in London, Monday, Feb. 25, 2013. THE CANADIAN PRESS/AP, Kirsty Wigglesworth

The pound has hit a two-and-a-half-year low against the dollar on fears that weak manufacturing data would push Britain's central bank to inject further stimulus into the country's economy.

Sterling had fallen 1.13 per cent Friday to be worth $1.4997 — its first foray below $1.50 since the summer of 2010.

Samuel Tombs of Capital Economics says the pound is being hit by weak manufacturing data, which might prompt a key bank committee to order quantitative easing to rev up the economy.

Britain's currency has been under pressure since Moody's Investor Service downgraded the U.K.'s cherished triple-A credit rating. Moody's said sluggish economic growth would hinder the government's ability to control rising debt levels and deal with new financial shocks.

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