BRITISH Steel yesterday counted the cost of sterling's relentless rise in world currency markets as its annual profits collapsed and forced it to launch a new cost cutting drive which will cull more jobs. Pretax profits were more than halved to £451 million sterling from £1.1 billion the previous year. The annual dividend was frozen at 10p per share.

"The steel trading outlook for 1997/98 is one of cautious optimism, although concerns remain about the current strength of sterling and its serious impact on our future profits," said chairman and chief executive Sir Brian Moffat.