British pound falls to new record low against euro

December 19th, 2008 - 6:31 am ICT by IANS  

London, Dec 19 (DPA) Britain’s pound sterling Thursday hit a fresh record low against the euro amid speculation of further interest rate cuts by the Bank of England to help stimulate the economy.The pound fell to 1.059 euros on the foreign exchange market, but strengthened slightly against the dollar, rising to $1.55 .

The dollar also weakened against the euro, two days after the US Federal Reserve cut its key interest rate to a range of between zero and 0.25 percent.

In an interview with the Financial Times Thursday, deputy Bank of England governor Charles Bean hinted that interest rates in Britain could also approach zero.

Speculation about further rates cuts was seen Thursday as one of the factors behind the sharp fall of the British currency, which analysts believe could reach parity with the euro early in early 2009.

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