Sterling Plunging - Labour Recession is here

After last nights speech by Mervyn King saying we are in recession Sterling plunged on the markets.

Not really surprising when you consider the state this country is in.

Guardian has this

The pound began tumbling last night as the Bank of England governor told business leaders in Leeds that the economy is shrinking and hinted at fresh interest rate cuts.

By this morning it had fallen by seven cents to $1.6209, a drop of more than 4%. Traders reported frantic selling as investors rushed to cut their losses by selling the UK currency.

Shares also fell sharply in London this morning, with the FTSE 100 shedding over 100 points, or 2.3%, in early trading to 4127.29.

Sterling had already been hit yesterday by unexpectedly gloomy manufacturing data showing that confidence has collapsed, and King's comments appear to have added to concern over quite how weak the British economy now is.

Guido has this

Government borrowing is at record levels, unemployment is heading towards two million, car workers are on a 3-day week, public sector workers are threatening strikes, nationalisation is back, Deripaska-owned Leyland is even in back the news and we are entering a recession. To complete the whole 70s era feel we have a sterling collapse. 6% last night, 20% since the beginning of the year.

The BBC's business editor is focusing on political gossip. Guido will therefore have to take up the slack on the business reporting front..

Pound falls to five-year low as Bank head admits recession is here | Business | guardian.co.uk