sterling

FIVE THINGS

Yields on UK government debt were climbing early this morning following Moody's decision to downgrade the UK's credit rating to Aa1, but equity investors shrugged off the news to send markets higher.

Taxpayers could face a £100 bn bill for the loss of Britain's much-prized AAA credit rating. The staggering sum, equivalent to 5p on the basic rate of income tax, comes from the Treasury's own forecast for a worst-case scenario.

The pound has moved towards a year low yesterday against the dollar, its recent weakness having been exacerbated by the revelation Bank of England (BoE) governor Sir Mervyn King voted for further stimulus this month.

The Monetary Policy Committee (MPC) voted unanimously to hold the bank rate at 0.5% at the last meeting, while all but one member voted to maintain the QE programme at £375bn.

Sarasin & Partners' Guy Monson has warned sterling's recent show of strength against the euro could be about to end, as ECB intervention draws near and the UK's QE policy weighs on the pound.

UK GDP for the fourth quarter of 2011 dropped by 0.2%, a worse than expected figure that will heighten fears of a double-dip recession.

The National Employment Savings Trust Corporation (NEST Corp) today invited bidders for its actively-managed sterling bond fund mandate.

Rayner Spencer Mills' Ken Rayner reveals which Sterling Strategic Bond funds should form part of your clients' portfolios.

Inflation climbed marginally in August as expected, driven up by higher utility bills.