The pound tumbled further against the euro yesterday, with the single currency climbing to an intra-day high of 80.6p which was within 0.4p of its 80.97p lifetime high in April.
The pound tumbled further against the euro yesterday, with the single currency climbing to an intra-day high of 80.6p which was within 0.4p of its 80.97p lifetime high in April.
Sterling, which continued to be weighed down by the weak UK economic picture, also dropped to a fresh two-year low against the dollar.
The pound touched an intra-day low of $1.8242 during yesterday's session. It was last night trading around $1.8265, nearly half-a-cent weaker than its close in London on Wednesday.
The euro was last night trading near 80.5p, up more than one-quarter of a penny on its Wednesday close. The single currency was boosted once more against the pound by signals from the European Central Bank that it would not be cutting interest rates in the 15-nation eurozone any time soon.
A poll published by Reuters meanwhile showed nearly half of UK economists now expect a cut in UK base rates from their current 5.0% level by the year-end. The proportion anticipating a pre-year-end cut has been growing steadily as economic conditions have deteriorated.
All 67 economists polled by the news agency between Tuesday and yesterday are forecasting the Bank of England's Monetary Policy Committee will leave base rates unchanged when it concludes its two-day September meeting on Thursday next week.
Reuters published its poll as lone MPC dove David Blanchflower, who has been pushing unsuccessfully for an immediate quarter-point cut in UK rates, hammered home his arguments for a greater reduction next week. Thirty-three of the 67 economists predict at least one quarter-point cut in benchmark UK interest rates by the year-end.
The median probability attached by economists to a pre-year-end cut in UK rates was 45% in the latest poll.
The median forecasts are that UK base rates will fall to 4.5% by March next year, to 4.25% by June, and to 4.0% by the end of 2009.
