Sterling fell as reports suggesting that the UK’s manufacturing and services industries contracted in July heightened speculation that the Bank of England will cut interest rates as soon as next month.

The euro fell for a third day yesterday, its longest stretch of losses this month, on speculation that European Central Bank president Mario Draghi will consider adding to monetary stimulus.

A “vintage era” for Irish small business exporters will likely extend through next year, as the euro remains lower for longer against sterling than once thought, leading economists have predicted.

Sterling advanced yesterday approaching its strongest level in three weeks against the euro, after Bank of England policymakers said China’s slowdown hasn’t shaken their conviction that the time for the first UK interest-rate increase since 2007 is coming nearer.

The euro fell to a six-week low against the yen as the inflation rate in the eurozone matched the lowest since Feb 2011 in June, adding to concern that the region is headed for a recession.

THE British pound, which fell to a four-year low against the euro, may extend declines after the Bank of England said it discussed cutting interest rates this month and said a weaker pound helps the economy.