Following a quiet start to the week for market data, sterling faltered again towards the end of last week. Poor second quarter GDP and retail sales data sent the pound lower still against the US$ and to the lower end of its recent four month trading range against the euro. For the second month running the Bank of England's meeting minutes released last week highlighted a difference of opinion within the ranks of the MPC by way of a three-way split, suggesting perhaps that long-term policy remains undecided.

Although ending the week higher against the Pound and the US$, the euro, currently at 1.2540/£1, had an indifferent week on the markets as rumours persist of its economy having ground to a halt. Weak German economic data and a decline in business confidence have leant to the feeling that interest rates could well be lowered in the following year as the credit crunch, now a year old, is finally beginning to take its toll on the Euro-zone.