Bloomberg analysts warn of falling Pound

Sterling rose to an eight-week high against the euro yesterday despite fears the pound’s rally is coming to an end. Currency traders warned sterling will soon go into reverse as spending cuts and tax rises outlined in the Budget curb economic growth in the UK.

Foreign exchange forecasters are the most pessimistic they have been about the pound since May 2009 when rating agency Standard & Poor’s said the UK was at risk of losing its AAA status, according to Bloomberg.