Sterling falls further against euro
Monday 29th December 2008, 3:29PM GMT.
The pound fell further against the euro today to new record lows.
Today the currency lost a further two per cent of its value, down to ?€1.023.
The fall in the value of sterling came off the back of more poor economic data, and the expectation of more interest rate cuts from the Bank of England in 2009 to maintain a lower cost of borrowing in the UK than the eurozone.
Sterling now increasingly looks likely to head towards parity against the euro in the short-term and for tourists at a number of bureaux de change the pound has already fallen below the €1 level.
However, the currency is expected to bounce back over 2009.
The Hargreaves Lansdown Sterling Outlook finds the consensus among currency specialists is for £1 to be worth between ?€1.00 and ?€1.30 by the end of 2009, with half expecting a return to the ?€1.201 to ?€1.300 level.
However, the report does warn: “Exchanges rates are notoriously difficult to forecast, even more so in the current economic climate.
“Crucial factors influencing exchange rates in 2009 will include: relative speed of recovery from recession, government borrowing and spending, risk-aversion, currency speculation and interest rates.”
Against the dollar, sterling also fell to £1 equalling $1.462.
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