Sterling fell against the US dollar today as ongoing concerns about the eurozone and a downbeat assessment of the UK economy from the Chartered Institute of Personnel and Development (CIPD), encouraged traders to flock back to the perceived safety of the US dollar.

According to the CIPD, the private sector is not strong enough to offset 120,000 job losses in the public sector, and this would lift the jobless rate from 8.3% to 8.8% in 2012. The CIPD wasn’t the only organisation to unveil a negative outlook for 2012, however. The Centre for Economics and Business Research recently warned a Lehman Brothers-style financial collapse remains a possibility despite endless summits and announcements from European leaders.

The CEBR also warned that the UK economy is not likely to recover fully from the current downturn until early 2015. On 22 December BoE Governor Mervyn King warned that in spite of the UK’s ‘safe haven’ status, the European sovereign debt crisis has worsened the outlook for financial stability.