What about spending – will this affect the pound in my pocket?
It looks that way, certainly if you were planning to go on holiday abroad this year, and probably even if you are having a staycation. The pound had already fallen against the euro and dollar, and the downgrade appears to have put it under renewed pressure.
"Last summer Britons were enjoying a sterling-euro rate close to €1.30 [to the pound]. Now the rate is below €1.15, that's a drop of more than 11%," says Tracey Tivnan of foreign exchange firm, Moneycorp. That means £500 will buy just €572 compared with €645 in July 2012. "Holidaying in Europe this spring and summer is likely to hurt them harder in the pocket, unless sterling stages a quick recovery."
Alas! The pound has re-bounded, due to the Italian elections stalemate, and is now comfortably above 1.16 euros:
Of course it has a long way to go to get back to the rates of last summer, but still ...
Difficult to know where to keep one's pennies. The euro is sinking, the outlook for the pound is gloomy, the dollar is doing well for the moment but that pesky cliff is approaching again.