UK pound falls to 5-year low against dollar

Next Politics & Policy Article LONDON - The pound fell to its lowest level against the dollar in five years Friday on fears that Britain's banking sector could suffer more losses from the world financial crisis, and that the dispute between Britain and Iceland over money in collapsed Icelandic banks could escalate. The pound fell as low as $1.6902, the weakest since 2003, later recovering slightly to $1.6913. The pound also fell against the euro, to euro1.245. The currency's low came after British Prime Minister Gordon Brown froze the British assets of collapsed Icelandic banks on Wednesday using anti-terrorism laws, which Icelandic Prime Minister Geir H. Haarde condemned as a "completely unfriendly act." The two countries are fighting over which government should compensate British savers and local government authorities for... [read full story]