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Tiffany Burk, European market analyst at Travelex Global Business Payments commented: "This is the biggest public sector net cash requirement for June since records began in 1984 and it is helping to send the pound lower in trading this morning."
The Forex specialist claimed the data showed governments had been too dependent on borrowing and suggested it would harden the coalition's reserve to go ahead with measures to reduce fiscal deficit and raise taxes.
However, she noted "appetite for risk remains positive in broader markets" and added this would not allow sterling to fall too far.
Reuters reports the FTSE 100 was down 0.6 per cent today, as fears of a global slowdown were piqued by concern related to European debt and negative financial results from corporate groups.
Posted by Greg Secker
