Pound in record fall during ’08

Bloomberg

Sterling was the worst performer against the dollar in 2008 among major currencies as policy makers reduced the benchmark rate 3.5 percentage points this year to limit the severity of the nation’s first recession in 17 years. The pound sank the most versus the dollar since at least 1972.

"My relative lack of optimism about the U.K. economy at the beginning of the year has been replaced by outright pessimism," said Jeremy Stretch, a senior currency strategist in London at Rabobank International. "It’s not surprising sterling has underperformed massively."

The pound strengthened 1.8 percent to 95.80 pence per euro at 4:41 p.m. in London Wednesday, from 97.57 pence on Dec. 30, when it breached 98 pence for the first time. It declined 23 percent against the euro in 2008. Against the dollar, the pound traded at $1.4601, from $1.4409, paring its annual decline to 26 percent.The Bank of England cut its main rate to 2 percent on Dec. 4, the lowest level since 1951, as lenders rationed credit and the U.K. economy sank deeper into a recession.