Confidence in the pound could crack at any time. At the moment, sterling remains firm and U.K. government bond yields remain low as investors shy away from riskier markets such as equities. The recent improvements in the U.S. economic outlook have failed to seriously dent support even though Treasury and gilt 10-year yields are now equal at 2.2%. The problem is that this will not last if the U.K. economic outlook continues to deteriorate. Apart from increasing expectations of another dose of quantitative easing, a scaling back in growth prospects will reduce the chance of the government meeting its fiscal deficit ... (full story)