Sterling slides to two-year low against dollar

0 Comments | AFP, August, 2008

LONDON (AFP) — The British pound hit a two-year low point against the dollar on Friday as dealers predicted interest rate cuts from the Bank of England to combat flagging economic growth.

Sterling slumped to 1.8512 dollars -- the lowest point since July 26, 2006. It later Friday stood at 1.8530, from 1.8677 in New York on Thursday.

The pound has shed more than 12 percent in value since hitting a 26-year high of 2.1161 dollars on November 9.

The British currency dived lower this week after the Bank of England issued a gloomy economic outlook.

The central bank had Wednesday said that British inflation could fall sharply toward the government's target of 2.0 percent from early 2009, which prompted traders to bet on interest rate cuts sooner than...