I agree, thermostat sounds like problem.
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My '92 Escort has been doing the same for over 20,000 miles now. I don't think there is any real problem with it - if I were asked to put money on it, I would say it is the gauge itself at fault.
While I am happy to live with my car's behaviour (I have a massive mistrust of any cheap dial on a dashboard), obviously, there may be a real fault in the case of the Fiesta...
number_cruncher
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