The pound is taking a pounding, and it's going to get worse. Dealers have been describing the traffic in sterling as moving in one direction – out. The only real surprise is that it has taken this long.

In part, the retreat – rout might be more accurate – is being driven by simple common sense. It's a nonsense to be sitting in sterling bonds that yield just above 2 per cent when you can get in excess of 5 per cent from the likes of GlaxoSmithKline or Vodafone.

The fact that the eurozone has calmed down, at least for now, is another contributing factor. Suddenly people are getting very interested in Spanish and Italian bonds, which (again) offer much better yields than ours do. I suspect the reason is that they spend far too much time sampling the better Spanish and Italian wines over lunch but you can't argue with the numbers. They are starting to invest there.

We're in the middle of what looks suspiciously like a devaluation. That might not be the worst thing in the world, particularly if you're an exporter. And goodness knows the UK could use a bit of export-led growth.

But it comes at a price, and the price is inflation at a time when the Bank of England's hands are in effect tied. Any attempt to counter this by raising interest rates threatens to send the economy into a horrible tailspin. One of the factors behind sterling's fall is the economy's recent poor performance. Now just imagine the impact of an interest rate rise on that.

Part of the blame for this has to be laid at the Chancellor's door. George Osborne might have been able to loosen the fiscal taps a little when the pound was being propped up by the (probably erroneous) belief that the UK was a safe haven.

He might have facilitated spending on infrastructure projects, smaller ones offering more value and less risk than the grandiose potential white elephant of a high-speed rail link announced yesterday. But he wanted to be seen as a tough guy, the man the markets could trust to keep the deficit reduction programme on track.

The trouble is, as he, and we, are now learning, you can't trust the markets to do what you want… even if they trust you.

I wouldn't bank on firms with these liabilities

The cost of the payment protection insurance debacle to the banking industry is now being put at £20bn, and rising.

People of a cynical, and conspiratorial, bent have taken note of the hard line the regulators have taken and detect, if not government interference, then at least strong support. It has provided a convenient way to transfer money from banks to consumers, and from them into the wider economy.

Of course, the flipside to this is that the £20bn – well, £20bn less admin costs – winging its way into the pockets of consumers is £20bn that can't be used for lending to businesses or to homebuyers.

Perhaps that's why the talk of putting a time limit on compensation claims is at least being entertained.

There's another reason to bring the curtain down on this one, too. The cost of PPI compensation could look like a drop in the ocean when it comes to claims related to Libor fixing.

That's what is really starting to worry regulators. Of course, no one's proved any actual manipulation yet. Just that it might have happened. And, with the banks all agreeing to assume the position and settle with regulators, it's never been tested.

That may change as American lawyers sharpen their claws, at least if the banks try to fight. Last week's big news story concerned the attempt by senior Barclays bosses to secure a gagging order on their names being reported as potential witnesses in the first Libor-related civil case on these shores. But any compensation on this side of the Atlantic will be pin money compared with what might be coming from America, where courts don't look kindly on foreign companies (allegedly) doing the dirty on their citizens.

If you have shares in a Libor bank, don't expect to see much in the way of dividends over the next few years. And if you're after a loan, forget it.

HMRC prefers to bully us than man the phones

The ad flashed up on the screen of the cashpoint at our local Tesco. A pair of threatening-looking eyes and a question: Have you declared all your income?

It was, of course, vintage bullying from HM Revenue & Customs, targeting ordinary people who lack the wherewithal to secure the sort of sweatheart deals enjoyed by big companies, or big earners.

This, remember, was the organisation that once created a fuss by sending out lorryloads of letters threatening visits from bailiffs to people who owed a few quid and were a few days late paying. For the record, I received one. After some fast work from my accountant it wasn't the bailiffs that arrived at my door. It was a small cheque in my favour.

But what should we expect from an organisation whose ambition is have only 80 per cent of calls answered within five minutes, two of which are spent listening to one of those infernal voice menus, the remainder just hanging on the (premium rate) line? Remember, that's an ambition. Incredibly Lin Homer, its chief executive, actually claimed that tax agents – accountants in English – say their calls are improving, if they can get through. I suspect this has been achieved simply by asking survey firms to "improve" their questions to secure a favourable result.

Still, at least Ms Homer – pictured left with Danny Alexander and the Chancellor, George Osborne – now knows how it feels to be on the receiving end, having been knocked about by Margaret Hodge and the House of Commons Public Accounts Committee. If only she could be hauled before them every week.