Following Moody's action on Friday, downgrading the UK's AAA-rating, sterling has fallen to a 16-month low against the dollar this morning.
From the Editor's column:
The real problem, as HSBC’s currency team, led by David Bloom, noted last night, is that markets “expected [Osborne’s] plan to succeed and sterling was supported accordingly, but growth continues to disappoint and the fiscal numbers are coming in shy …for the market, the downgrade will underline that their earlier belief in the plan has proven wide of the mark. Part of the re-pricing of sterling that this reappraisal implies is already underway. There is more to come.”