sterling

Sterling is not gaining safe haven status as some suggest, says Barclays Wealth equity strategist Henk Potts, and it would be a mistake to give up on balanced long-term investing now.

Equity markets are pricing in a double dip, high-yield looks attractive, and volatility of gold returns are likely to increase, according to head of investment strategy at Barclays Wealth, Kevin Gardiner.

Sterling fell to its lowest level against the euro for a month after the Bank of England cut its growth forecast for this year.

Sterling tumbled a cent against the dollar earlier on surprise news Britain's manufacturing sector grew at its slowest for two years in May, sparking fresh fears about the economic recovery.

Sterling has recovered from a seven-week low, moving higher against the dollar after it fell on Moody's threat to downgrade a raft of UK banks.

Inflation rose to its highest level since September 2008 last month, reversing the previous month's retreat and breaking sterling's five-day decline against the dollar.

Sterling jumped across the board after the Bank of England's latest report said inflation is likely to remain above target for longer, fuelling expectations the MPC will act sooner to tackle price rises.

Speculation the Bank of England will lower its economic growth forecasts has caused the pound to slump in afternoon trading.

Ex-pat retirees who receive their pensions in sterling are seeing their incomes squeezed by the weak pound, an international wealth management firm said.

The pound has risen against the euro after UK GDP growth was reported as -0.5% in Q4 2010, slightly ahead of previous estimates of -0.6%.