The pound suffered heavily in trading yesterday and has continued on a weak tome this morning. Yesterday the pound fell against the USD,EUR, JPY, NZD, AUD- so basically across the markets. The reason for the fall in the pound is down to the factoring in of negative feedback from the UK economy tomorrow from the UK Quarterly Inflation Report and from UK unemployment data. The quarterly inflation report is expected to emphasise a downgrade in growth forecasts for the UK and to highlight why the expansion of QE by GBP50 billion was deemed necessary. The UK unemployment data is expected to show further rising unemployment in the UK as we approach unemployment levels of 2.5 million. GBP/USD retraced from 1.67 to 1.645 and GBP/EUR dropped from 1.1770 to 1.16. Sterling also slipped under 160 against the Japanese Yen, hit a Feb 2008 low against the NZD at 2.4337 and hit lows not seen since 1997 against the AUD of 1.9622. One positive that helped to stem the free fall came in the form of data from RICS (royal Institute for Chartered Surveyors) which identified that house price balance came in at -8.1, better than the expected -10 and the highest reading since August 2007. In addition newly agreed sales also rose to the highest reading since August 1999. Recently we have seen a flurry of improved data from the housing sector and this has rallied the optimists into talking of a recovery in this sector. So can we sit back and expect to see a recovery and rising house prices? Personally I fear not as normally a property crash lasts about 5 years; also in the UK we still have rising unemployment which will undoubtedly have a knock on effect in the housing sector and lastly when interest rates increase from current low levels we could see a reality check as repayments and mortgage rates rise.