Sterling has dropped around 13 per cent against the euro in the past two months as the Bank of England has slashed interest rates in its attempt to stave off a deep and prolonged recession.
UK rates have dropped to 2 per cent, below those in the eurozone after a 1.5 per cent cut in November and a 1 per cent cut earlier this month, which has compounded the pound's woes.
The weaker currency could provide a boost to UK exporters but the economic woes of major export markets such as the US and Europe is hitting demand.
It is thought short-selling - where investors sell assets such as shares or currencies in the hope of buying them back later at a lower price and pocketing the difference - is also behind the pound's slide.
The pound has also suffered big recent falls against the dollar but was holding steady at just under $1.50 today.Reuse content