Disastrous GDP sends sterling lower

The first estimate of GDP for Q4 2010 shows the UK economy shrank by 0.5% – much worse than analysts’ expectations of a 0.5% growth figure.

The Pound has fallen a cent against both the Euro and US Dollar this morning.

Mervyn King’s speech this evening is unlikely to help, with many observers thinking that the Bank of England will not raise interest rates for some time to come, so sterling does not look likely to have any support in the short term.