By Colm Gilhooly

Sterling is at a 4 month low against the Euro and has lost a huge amount of ground against all major currencies following Mervyn Kings recent comments refusing to rule out out further Quantitative Easing (“printing money”) as a means of getting the UK economy out of recession. He also mentioned he may cut the rate of interest paid on deposits the UK banks have with the Bank of England to force them to move the money elsewhere to get better returns and as a result stimulate credit conditions. With levels of national debt now at gargantuan proportions it seems difficult to see any support for Sterling in the short term so a lot of focus will move towards the upcoming B of E minutes to see if further Q E is indeed on the cards, or whether the recent fears for the Pound have been overstated. As such Wednesday could be a very important day until the next rate meeting in October.