THE TELEGRAPH: The pound has slumped to a record low against the euro amid signs the Bank of England could cut interest rates still further.
At the low point in trading today, one pound bought just under 1.22 euros - marking the currency's weakest point against the European currency since its launch in 1999.
The euro's strength comes in the wake of UK interest rates being slashed by 1.5 per cent to 3 per cent last week by the Bank of England, a move which encouraged investors to seek more lucrative returns abroad. Statistics out today pointed to a sharp slowdown in inflation, suggesting there may be scope for further reductions in borrowing costs in the months to come.
The pound has also taken a battering against the dollar in recent weeks, and is now trading around $1.57 and down from over $2 in July.
With interest rates already at a 50 year low following the sharpest reduction in decades last week, markets are eagerly watching the economic data to see whether there is potential for any further cuts. For the first time since the inception of the Eurpoean Central Bank, UK rates are now lower than in the eurozone. >>> | November 10, 2008
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