The pound plunged yesterday, with its overall value tumbling to its lowest for 13 years, as another spate of dire economic news left markets convinced that the Bank of England will order a further, drastic cut in interest rates today.
A further one-point drop in official base rates would take them to 2 per cent, the same level that it was in 1951. A more radical cut of 1.5 points, for the second month in a row, would put the Bank into uncharted territory, taking rates to their lowest in its history which stretches back to 1694.
The fall in the pound has caused the exchange rate to drop to 1.162 euros to the pound. This just had to happen on the very day when my pension was transferred to our Spanish bank account. I now have almost 270€ less to spend per month than I had last year in spite of an increase in my pension.
What is desperately needed is for the European bank to cut its rate to bring the stronger euro in line with the pound. That would make my New Year brighter!