Sterling has struggled to make much headway today against the dollar, as a dearth of UK economic data shifts the focus away from Britain, even if the French are doing their level best to make we Britons look as bad as possible.

Leaving aside what Paris thinks (and apart from wry smiles, it seems that London is quite happy to let them flail angrily on their side of the Channel), the outlook for the UK remains gloomy, and with Fitch downgrading several banks last night, people have been reminded how Britain’s large financial sector can be a drag on the UK if the global economy experiences another credit crunch. While the Bank of England has the option of active monetary support of the economy, this will have the corollary of weakening sterling. Either way, it will be a difficult start to the New Year for the pound.