LONDON (Reuters) - Sterling fell on Wednesday for the 12th consecutive day as the U.S. dollar strengthened, leaving the pound at its weakest since June 2017 and facing its longest losing streak since the depths of the financial crisis in 2008. A bank employee counts pound notes at Kasikornbank in Bangkok, Thailand October 12, 2010. REUTERS/Sukree Sukplang/File Photo Sterling has weakened sharply in August as traders grow increasingly worried that Britain will crash out of the European Union next year without a trade deal, and as the dollar has surged. On Wednesday the pound slipped further to as low as $1.2689, its weakest since June 22, 2017, as the dollar extended its rally and after British inflation data for the month of July came in as expected. A 12th session of losses would match the pound’s losing run of August 2008. The pound also fell versus the euro after earlier gains, and was down 0.1 percent at 89.340 pence per euro in late European trading. “It’s not just a question of Brexit, it’s also a recognition that the UK economy has not been particularly strong,” Aviva Investors head of multi-asset funds Sunil Krishnan told Reuters. “So, recognising there will be a great deal of volatility in sterling in both directions as we have news and rumour around Brexit you can see a weakening trend for sterling ... we are generally underexposed to sterling and position for sterling to weaken a bit more from here,” he said. Consumer price inflation nudged up to 2.5 percent year-on-year in July from 2.4 percent the previous month, in line with a Reuters poll of analysts, data showed on Wednesday. The rise is the first time inflation has picked up in 2018 and leaves many British households still feeling squeezed - workers’ wagers have failed to keep up with inflation for much of the past decade. Data on Tuesday showed British workers’ wages rising at their slowest rate for nine months, up 2.4 percent annually, although there was also a surprise fall in the unemployment rate. “What is likely to be more concerning domestically is that inflation is once again outpacing wage growth, which will lead to the question over whether the Bank of England (BoE) might be tempted to lean towards another increase in UK interest rates,” FXTM market analyst Jameel Ahmad said. The BoE raised rates in early August but made it clear that future hikes would be limited, gradual and dependent on Britain securing a smooth departure from the EU. British retail sales data is due on Thursday. Reporting by Tommy Reggiori Wilkes; Additional reporting by Sujata Rao; Editing by Alison Williams
Sterling has experienced its longest decline in value since the financial crisis of 12 consecutive days. It fell for 2008 to trade against the dollar at $1.2689 – its lowest level since June 2017. Concerns about the underlying state of the UK economy are being cited as having contributed to the slide, along with a growing concern among traders that the UK will leave the EU without a trade deal next year.