The outlook for sterling took a hit on Wednesday, after it emerged the two remaining hawks on the Monetary Policy Committee reversed their stance and voted to hold interest rates at 0.5 per cent at the latest meeting.
Whenever markets go through a period of high volatility there are a handful of assets investors turn to for safety: gold, the dollar, the yen, the Swiss franc and (ordinarily) government bonds.
The pound fell across the board on Wednesday, after the Bank of England's quarterly inflation report said the UK growth outlook had weakened since May.
The euro was up against most major counterparts on Monday after the European Central Bank (ECB) announced an extension of its bond-buying to embattled nations Spain and Italy.
The UK base rate was held at its record low of 0.5 per cent on Thursday for the 29th consecutive month, as the Bank of England remained concerned about the strength of the recovery.
Lloyds Banking Group reported losses of £3.3 billion in the first half of the year, as provisions for compensating payment protection insurance (PPI) victims dented its balance sheet.
Barclays became the second of the big banks to report on Tuesday, posting pre-tax profit of £2.64 billion in the first half, down 33 per cent from £3.94 billion in the same period last year.
HSBC recorded pre-tax profits of $11.47 billion (£6.99 billion) in the first half of 2011, in what it termed as the 'first step in the right direction of what will be a long journey'.
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