History shows sterling not heading off a cliff
Dollar hovers near record low"It's all in the context, clearly we've seen a sharp fall in cable (sterling/dollar) but the rate of sterling against the euro really hasn't changed all that much in the last couple of months," Investec economist David Page said.
The euro has hovered in a roughly two-pence range between 78 and 80 pence over the past four months.
Whatever the real source of the pound's quick-fire tumble, analysts say it is a necessary component to help the floundering British economy to re-balance.
"A period where we need to grow and rebalance away from domestic demand towards investment and industrial output growth implies a weaker currency and that's what we're seeing," Lloyds TSB's Williams said.
"There will be slower growth but it means we'll get much more sustainable growth."
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