The pound slid against the euro and dollar this morning as fears about the prospects of a hung parliament grow and as data showed a sharp fall in mortgage approvals. Against the dollar the pound fell below $1.50 for the first time since May last year. At just after 12pm the pound was worth $1.488. Sterling also hit a six-week low against the euro at €1.0995. A poll in the Sunday Times showed that the Conservative Party’s lead against Labour has narrowed further, shrinking to just two points and making a hung parliament increasingly likely. Meanwhile the Bank of England published stats showing that mortgage approvals had dropped by 17% in January. Nick Beecroft, senior foreign exchange consultant at Saxo Bank, warned this could be the start of ‘what can justifiably called the beginnings of Sterling’s collapse’. ‘Expect a test of 1.40 within a month and, as the global landscape turns ever more ugly on the back of deflation and sovereign debt concerns, a continuing flight to the US Dollar, taking Sterling down below 1.20 by the summer,’ Beecroft said. Mark Bolsom, Head of the UK trading desk at Travelex, said: ‘As we face down a period of severe fiscal tightening with higher taxes and swingeing public spending cuts, consumers remain very concerned over the security of their jobs and economic future. Credit conditions also remain very tight as the banks keep tight controls over lending to both consumers and businesses.’

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