fragility of the UK’s recovery sent sterling lower yesterday, while gilt prices rose.
The pound fell 0.6 per cent to $1.615 by the close of business, also slipping 0.2 per cent against the euro and 1.4 per cent versus the yen. Benchmark 10-year gilts rose 0.17 per cent in price and saw their yields slip.
Standard Life recommended selling pounds and buying dollars, betting sterling’s value would fall as low as $1.587.
“The slow recovery makes normalisation of conventional policy a distant prospect,” analysts at RBC Capital Markets added in a note.
The FTSE 100 closed up 16.54 points yesterday at 5,276.85, despite reaching an intraday low for the year of 5,215.73.