THE pound hit its highest level against the struggling euro since early 2008 in the final trading session of the week, as expectations mount that the European Central Bank is poised to implement further monetary easing.

The euro has also been hit in recent days by the turmoil on the foreign exchanges resulting from the Swiss National Bank's unexpected decision to scrap its three-year-old cap on the Swiss franc's value against the euro. This cap had provided support for the single currency.

Sterling has risen sharply against the euro since late last year even though the prospect of the first rise in UK base rates from their record low of 0.5 per cent has become ever more remote. Some economists are predicting the first rise in base rates may not even come this year in the wake of a raft of economic evidence signalling the unbalanced UK economic recovery has been losing momentum.

The euro yesterday tumbled to an intra-day low of about 75.93p. The single currency was trading around 76.12p by 5pm in London, down 0.44p on the session.

Sterling's rise against the euro will be making life even more difficult in key overseas markets such as France and Germany for exporters in Scotland and elsewhere in the UK, reducing their relative competitiveness.

However, it will make eurozone countries cheaper destinations for holidaymakers from Scotland and elsewhere in the UK.

On January 8, the pound fell to its weakest level against the dollar since July 2013, touching an intra-day low of about $1.5032. This tumble against the dollar, from levels above $1.70 last summer, has come against a backdrop of a strong performance by the US economy as well as an unbalanced and slowing UK recovery.

Expectations that the European Central Bank will have to provide further stimulus to eurozone economies grew with the revelation earlier this month that consumer prices in the single currency bloc in December were down 0.2 per cent on the same month of 2013.