The pound has fallen below 88p against sterling as the British currency continues to rise, writes Jane Suiter. Sterling pushed ahead to five-year highs as investors continued to focus on general yen weakness and ongoing banking problems in Asia. The pound closed at 87.15p against sterling in late trading and at DM2.6090.

Mr Kevin Daly, economist at Ulster Bank, said the pound is now capped at about DM2.61 as even that reflects a larger revaluation than many analysts are predicting.