THE pound has dropped sharply against the US dollar as financial markets fretted over warnings the UK is already in recession and fears Chancellor Jeremy Hunt’s austerity budget will compound economic woes.
Sterling dropped more than 1.2% to 1.177 US dollars and was 0.5% lower at 1.14 euros in the wake of the gloomy forecasts from the independent fiscal watchdog, the Office for Budget Responsibility (OBR), and Hunt’s £55 billion cocktail of tax hikes and spending cuts.
