Currency watch: World markets tumble

Tell me if you’ve heard this one before. Falling stock prices, banks creaking, investors fleeing and the world seemingly pitched head-long into a crisis.

2008 seems like ages ago, but the reality is that the markets seem determined to bring the world economy to its knees.

Three years ago banks were in the crosshairs as their access to short-term funding dried up, causing them to call in their loans and the housing market to crumble.

Today it is not the banks but the actual countries themselves that are in the firing line.

Inefficiencies, poor practices and weaknesses have been exposed around the world.

Even the US seems to be pitched headlong for a double-dip recession as consumer and manufacturing growth judders to a halt while governments in Europe fight to maintain sovereignty.

The green shoots of recovery have well and truly been stomped into the ground. It will be an autumn full of scary headlines unfortunately.

This does not mean that all is lost for the pound however. We have our problems in the UK – only the staunchest Conservative would disagree – but they are nothing compared to what is happening in Europe and the US.

The foreign exchange game is regularly referred to as a “parade of ugly sisters”; they’re all horrific but you have to dance with one, so close your eyes and get in there.

The pound is horrible at the moment but it is nothing compared to what the Europeans and Americans have sent over.

Jeremy Cook is chief economist at World First foreign exchange