Sterling slides to record low against euro

Sterling plunged against major currencies today, hitting a record low against the euro, following signals that the Bank of England may cut interest rates further.

Indications that the bank is ready to cut rates to all-time lows below 2% to stave off a deep recession sparked the latest sterling sell-off.

The pound fell below 1.50 US dollars to its lowest level for more than six years against the greenback, reaching 1.489 at one point.

The rout continued against the euro as the pound breached the 1.20 level to hit a record low of 1.188.

The pound’s tumble is bad news for holidaymakers but could eventually give some respite to British exporters facing a sharp slowdown in demand.

In November last year – when British rates were still at 5.75% – one pound bought 2.11 US dollars.

Sterling was also trading at 1.40 against the euro.

CMC Markets analyst James Hughes said: “Anything that points towards yet more cuts at the start of next month will have the potential to heap yet more pressure on the pound.”