A fall in manufacturing activity last month has led the pound to slip, Caxton FX has identified.
Data shows that output fell significantly in August, marking its lowest level since November last year, leading to concerns over prospects for the second half of this year.
Duncan Higgins, senior analyst at Caxton FX, said: "Today's data certainly hints that economic conditions may already be starting to lag, and if data from other indices begins to head south, sterling could come under increasing pressure."
He added that the government's fiscal tightening has led to a renewed focus on the possibility of restrained economic growth.
Last month, Caxton FX revealed that Sterling had been boosted by the government's decision not to increase the base rate from its historic low of 0.5 per cent.
It helped restore the pound after it was hit by Barclays' disappointing second quarter profits.
©2008 fundsnet |