Concerns about bad loans made in the US subprime mortgage and unsecured lending sectors have impacted on stock markets and currencies the world over.

The pound traded for 1.9860 against the dollar in early Thursday trading, falling from 1.9887 on late Wednesday.

Decline against the euro was arrested slightly on Thursday morning as the pound rose to 67.62 from 67.59 yesterday.

Traders all over the globe are unwinding their carry trade investments, which has negatively affected sterling, among others.

The pound is trading near a two month low after the Bank of England published the latest monetary policy committee minutes which showed that the decision to freeze the interest rate in August was unanimous.
In the minutes, the MPC says it has "no firm view" on whether there will be any more rises in the base rate this year.

It was also revealed that inflation in the UK has dropped below two per cent for the first time in nearly 18 months.