Pound Drops Below USD1.49

The pound fell below 1.49 against the dollar this morning after data showed that UK industrial output fell by 0.4% in January, contrary to expectation of an increase of 0.3%.

The data follows yesterday's bad news that the UK’s trade deficit widened to GBP8 billion from GBP7 billion the previous month, about GBP1 billion more than economists had predicted.

Fitch ratings joined the circling vultures, criticising the credibility of the Government's budget plans and warning again over the longevity of Britain's AAA credit status.

Meanwhile Labour and the Conservatives are "neck and neck" in their battle for marginal seats according to a poll in the Times yesterday.

An Opinium poll in the Daily Express suggests that even with a 7 point lead over Labour, the Tories would fall 18 seats short of an overall majority at the next election.

It looks like this one will go to the wire, the increasing uncertainty as time goes on is likely to see the pound fall further.