Pound's Rally Very Short-Lived

The pound staged one of the shortest rallies in history this morning, at on stage rising more than 4 cents from Thursday's 2 1/2 year low against the dollar of $1.7515 to $1.7973 as the dollar weakened in the aftermath of the Fannie & Freddie takeover.

However by mid-morning news that UK factory gate prices fell at their sharpest monthly rate in at least 22 years in August and raw material costs also dropped more than expected had soon taken the shine off sterling which stood at $1.7647 at 10.36am BST.