Is Sterling set for a winter of discontent?

Commenting on the future of Sterling after yesterday's base rate cut, Stephen Heath, Chief executive of FairFX.com, said: "Yesterday was key for understanding where the Pound is heading. All the key technical indicators show we might see Sterling strengthen against the Dollar. However, November set a precedent and the markets are expected to rally behind the Pound if it falls to around $1.44 to £1. The $1.44 mark is currently a key technical trigger point for traders who will start to support Sterling heavily at that rate for the short to medium term. It is possible there will be further falls next year, but I doubt we will go below $1.3 to £1.

"As yet the Euro has not shown any sign of weakening against the Pound, so fundamentally we have no reason to expect Sterling to begin to strengthen against the Euro for a while to come.

"All in all the Pound isn't looking strong, but the markets aren't going to let it go under just yet."