Pound hits record low against euro

Mounting expectations of a rate cut from the Bank of England this week saw the pound fall to a record low against the euro today.

The cost of a euro rose above 80p – hitting UK holidaymakers planning trips to Europe – reaching its highest level since the single currency was introduced in 1999.

The euro has gathered increasing strength against the pound as the European Central Bank (ECB) has held rates steady since last June despite financial turmoil.

This compares with the Bank of England’s two cuts since the start of the credit crunch – and a third quarter-point cut to 5% expected tomorrow.