Britain's recovery is more fragile than previously thought, official data showed on Tuesday, as statisticians revised down growth for most of last year and revealed that the UK's current account deficit is now at its joint-widest on record.
Sterling dropped against the dollar on Tuesday after new figures showed growth was less robust between the second quarter of 2013 and second quarter of 2014 than previously thought. Weaker manufacturing growth, a smaller than expected surplus in services exports and weaker government consumption over the period were behind the downgrades, the ONS said.
While the pound pared back some of the losses on Wednesday, it has dropped by more than 5pc against the greenback over the past year, meaning holiday holidaymakers receive $90 less per £1,000 they exchange on holiday.
US growth figures on Tuesday showed the world's biggest economy expanded at an annual pace of 5pc in the third quarter of this year, and many analysts expect the dollar to strengthen further in the coming months.
While the Office for National Statistics (ONS) left its final estimate of third quarter GDP growth unchanged at 0.7pc, the year-on-year figure fell from 3pc to 2.6pc due to downward revisions to growth in each of the five previous quarters.