The UK government has announced very last rescue project to assist the financial system, to help banks. The new financial plan has a cover to protect the banking system from future losses. The UK banks is going to pay for the cover, in cash. However all that means the value of living will plunge, deflation pushes saving even if this might reduce Englands economic situation.

House prices continued to fall fast, and the country’s greatest mortgage lender, Halifax, announcing, more than 16 % annual decline in during last year. Property prices have already gone down 0.2 since their peak and more declines are very possible as authorizations for home mortgages have hit a record low, as reported by banks.

The number of unemployed people increased up to 1 million in November, climbing super fast since 1990 The financial recession has pushed thousands of professions cuts in several different market areas, with some forecasts of 3 million unemployed by the end of 2010. Several stores have gone bankrupt recently. Stores have also been slashing prices to to be able to cover their bills.

The economy policy resolutions of British government are mainly focused on pushing the country but do nothing for the sterling. Which means the pound will likely going to lose value. We will see the raise of the pound but forecasts for the GB pound is indeed still negative.

Recent stats amongst financial analysts say that most likely the Bank of England will cut borrowing costs to 1.25 points from today’s 2 %, putting the interest rate to the lowest since the 17 century.

This means a lower return for the investors who then invest in other currencies, because of the decline of the pound.

Policymakers have stated the Bank of England may eventually have to cut bank interest rates to zero and resort the last resort, by producing new sterling to buoy the financial situation. This looks like to go well with Gordon Brown’s plans of spending their way out of the credit crunch crisis, the exact opposite of majority of European governments attitude, hence a possible cause for the massive drop in Sterling against to the Euro and US Dollar. Exchange foreign currency with the greatest of ease, use Foreign Currency Direct.