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sterling fell 4%, close to $1.03 — it's since regained some ground to stand around $1.06. the fall in the pound threatens to further fuel inflation because it makes imports into the uk more expensive, and adds to the costs for british businesses. it also puts further pressure on the uk's finances, as the cost of borrowing for the government rises. markets are signalling they expect interest rates to rise further as a response to sterling's fall, with investors predicing interest rates could hit 4% by the middle of next year. the pound fell dramatically on friday after the government announced huge cuts to taxes and more borrowing. sirjohn gieve is a former deputy governor of the bank of england, and member of the monetary policy committee, the group that decide interest rates in the uk. he spoke about his concern this morning. i concern this morning. think i would be worried. thi bank, i think i would be worried. the bank, and indeed the government,