Britain's pound is on course for its worst week in a year

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Britain's pound is on course for its worst week in a year

LONDON - Sep 1 : Reuters Sterling was set for its third worst week in the past year as risk sentiment soured across global financial markets while a shortage of truck drivers and a surge in energy prices disrupt and blacken the prospects of the economy.

If the Fed raises interest rates the potential for the market to do so has the Bank of England failed to keep it alive.

It's been another grim week for the pound, which still struggled to beat sentiment swings and remained highly sensitive to the recent hawkish removal of Bank of England rate expectations.

Another risk-free day today could see EUR GBP tick higher again, Pesole added.

At 0815 GMT the pound was losing to the euro 0.15% and down 0.17% against the dollar at $1.3450 at this rate; sterling was on the course for a weekly loss of over 1.5% against the currency

The British pound was one of the strongest G 10 currencies earlier this year as investors bet that Britain will re-emerge faster from pandemic thanks to Britain's rapid vaccination programme.

However, the narrative has crumbled since, with sterling bounding all of its strong 2021 gains and erasing a yearly loss to sterling.

The strength of the Greenback, which began the last quarter of 2021 near its highest levels of the year boosted by a hawkish-sounding Federal Reserve, weighs on the pound.

More than two thousand British gas stations were totally dry on Thursday, thanks to a shortage of truck drivers which was starting to disrupt delivery to pharmacies, while farmers warned a lack of butchers could lead to a massive culling of pigs.

The current petrol crisis is underlining the effects of Brexit, although much Prime Minister Terry Johnson is trying to make it all sound positive, argued Commerzbank analyst Antje Praefcke.

The sceptre of stagflation has not yet reared its ugly head but remains a possibility, she added, also noting her soured relations with France due to post-Brexit fishing rights issues.

Data released by the Office of National Statistics showed that while the economy grew more than previously thought in April-June period, it was likely to slow down as post lockdown bottlenecks, including the shortage of truck drivers, undermine the recovery.