News of Britain's biggest trade deficit in goods since records began in the late 17th Century brought the pound's recent rapid rise against the dollar to an abrupt halt Friday.

In another turbulent day on the global markets, sterling fell by almost two cents against the U.S. currency after the Office for National Statistics revealed that the UK's shortfall in goods widened from £6.9b to £7.8b in September.
The pound had scaled a new 26-year peak of $2.1160 against the dollar ahead of the trade figures but fell back amid concern that the high exchange rate against countries outside the Eurozone was hurting exports and growth.
Other major currencies continued to rise against the greenback, with the euro hitting a peak of $1.4752 - its highest since its launch in January 1999 - and the Japanese yen at an 18-month high.
Shares fell heavily on both sides of the Atlantic amid fears that the credit crunch triggered by the U.S. sub-prime mortgage crisis was proving costly for Wall Street and City banks.
The U.S. bank Wachovia reported hefty credit losses, prompting a sharp early sell-off in New York while a fall of nearly 6% in Barclays on rumors that it faced a $10bn contributed to a 77-point fall in the FTSE 100 to 6304.9. New York's Dow Jones industrial average was 160 points lower at lunchtime.
Consumer confidence
Plunging consumer confidence in the U.S. added to the gloomy mood, with analysts dismissing an improvement in America's trade deficit as a temporary phenomenon that would be reversed by the rise in oil prices.
The cost of crude rose more than half a cent to just over $96 a barrel in early New York trading but was well down on its peak of almost $99 earlier in the week.
The monthly survey by Michigan University showed consumer sentiment at its weakest since the aftermath of Hurricane Katrina just over two years ago, with analysts predicting worse to come.
James Knightley at ING said: ""Unfortunately the situation is likely to deteriorate further given the ongoing deterioration in the housing market, the negative effects of falling equity markets and the erosion of purchasing power caused by the surge in energy costs. Consequently we suspect the Fed will be forced into a December rate cut with rates likely to move below 4% in the second quarter of 2008"".
In the UK, analysts said the sharp rise in the trade deficit in September was unlikely to affect the Bank of England's thinking on interest rates, but that the deterioration was likely to lead to slightly lower economic growth.
""The trade data for the third quarter as a whole are consistent with external trade making the largest negative contribution to quarterly gross domestic product growth since 2002,"" said Peter Newland, an economist at Lehman Brothers.
(Source: Guardian)