The pound has suffered its worst monthly fall against the dollar since the UK left the European Exchange Rate Mechanism in 1992. Sterling has dropped 8.2 per cent in August, not far off its 8.6 per cent tumble of October 1992. Back then, Norman Lamont, the chancellor of the day, sang in his bath, delighted at the liberation of the UK currency, which later proved a turning point for the economy. There is little today to prompt a similar reaction from Alistair Darling, his successor. At a 12-year, trade-weighted low, a weak pound will help stimulate exports, benefiting FTSE-100 companies more than domestically orientated FTSE-250 companies. But it will slow the pace at which the Bank of England can lower rates to head off the looming recession. The only song Mr Darling might usefully practice is perhaps the government’s funeral lament.

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