One of the world’s best-known traders said last week the UK economy was “finished” and that investors should get out of Britain.

Jim Rogers, the former investment partner of George Soros, the speculator who made $1 billion from the collapse of sterling in 1992, said: “I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK.”

Sterling fell to $1.35 on Friday — its weakest point since 1985 — after a government rescue plan for British banks earlier in the week failed to prevent a sharp fall in bank shares, and prompted concerns about the nation’s escalating debt burden.

The pound fell 8% against the dollar over the week and against the euro it fell 5% to ¤1.05. Since November 2007, sterling has plunged about 34% against the dollar.

While Rogers’ bullish views on China and commodities in the mid-1990s had a strong run, they have turned sour in the past six months and he has been wrong on other things. His remarks have been met with caution by advisers.

Jonathan Jackson at broker Killik said it was “unrealistic and impractical” for investors based in the UK to abandon all sterling-denominated investments as this would add a currency risk to their portfolio.

“If you live in the UK but all your investments are overseas, you have the added risk of currency fluctuation whenever you realise a profit,” he said.

Other analysts point out that periods of sterling weakness can in fact be good for UK equities. We offer some tips, from investing to buying your holiday money.

BUY THE FTSE, SELL THE DAX

Historically, periods of a sharply depreciating sterling have been positive for UK equities, according to Morgan Stanley. It points out that since August 2007, when sterling reached a peak, the MSCI UK index has outperformed MSCI World by 15% and MSCI Europe by 25%.

Graham Secker at the investment bank said: “Boosting your holdings in UK equities seems counter-intuitive given fears about the depth of the UK recession and the strength of UK banks’ balance sheets.

“However, these fears are widely known and we continue to recommend that investors buy the FTSE and sell the Dax.”