LONDON: Sterling fell another cent overnight to its lowest in 18 months, suffering from the mix of dollar strength, weaker UK growth prospects and political uncertainty that have seen it slump since the start of the year.
Signs that Britain's economic recovery may be losing steam have prompted investors to push back the estimated timing of a first Bank of England interest rate rise into next year. Six months ago, many expected a move before the end of 2014.
But while the pound has weakened steadily against the dollar, by the start of this year it had fallen less than 1 percent against a basket of currencies from peaks last July. Since then, it has sunk 1.7 percent in three days.
A Bank of England meeting on Thursday is expected to add nothing to the debate, keeping policy on hold, but construction and industrial output numbers on Friday will be watched for signs of more economic weakness.
"The new information on the pound since the holiday season is weaker growth," said Paul Robson, a currency strategist with RBS in London, pointing to downward revisions of gross domestic product and poorer readings from purchasing manager surveys. He said estimates of Britons' relative spending power now valued the pound between $1.40 and $1.50. "Sterling may spend a lot of this year with a 1.40 handle," he said.
The pound hit an 18-month low on Wednesday and it had extended that to $1.5034, down 0.4 percent on the day, on Thursday.
It was also 0.1 percent lower at 78.42 pence per euro. pushing it down another 0.2 percent in trade-weighted terms.
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