While the pound has fallen against sterling, it remains very strong against the other ERM currencies.

Dealers believe the pound could continue to ease against the other ERM currencies in the days ahead.

Recent studies have suggested that phosphorylation of merlin, as of other ERM proteins, may regulate its function.

This will be unwelcome to the Central Bank, as it means a volatile exchange rate against the other ERM currencies.

And second, the pound is being pulled up against the other ERM currencies, such as the deutschmark and the French franc.

The crux of its difficulties is that the pound is being pulled up in sterling's wake against the other ERM currencies.

And then over the past year the pound has fallen sharply against a rising sterling, but gained ground against the other ERM currencies.