Pound Drops Versus Dollar On Signs Global Growth Slowing

The pound is mixed this morning, gaining against the broadly weaker euro, but consolidating against the dollar as worldwide stocks sank amid growing concern the global economy is slowing. The S&P 500 Index slid 4.5% yesterday while MSCI Asia Pacific Index tumbled 3.1% during overnight trade. Economists fear that US economy may expand less than previously forecast in 2011 and 2012 because of the potential “political paralysis” and fiscal tightening measures. However, sterling gained against the single currency during overnight trade on speculation European Banks lack sufficient capital, prompting concern that European Central Bank will cut its benchmark interest rate in near future. US regulators stated yesterday that they are paying close attention to Europe’s largest banks on concern the euro region debt crisis may lead to funding problems. Looking ahead to Britain today, Public Finance figures headline the economic calendar, with the expectations for the PSNB (Public Sector Net Borrowing) ex Interventions to have been 2.4 billion in July after reaching 14.3 billion in the month before.