Sterling slumps to record low against euro

0 Comments | AFP, December, 2007

LONDON (AFP) — The British pound hit an historic low against the euro on Friday owing to heightened expectations of cuts to British interest rates in 2008.

The euro surged as high as 72.56 pence in late afternoon London trade, the highest level since the creation of the European single currency in 1999.

This week, the pound has also fallen beneath 2.0 dollars as markets moved to price in an increasing likelihood of aggressive interest rate reductions from the Bank of England, dealers said.

Minutes from the December 6 meeting of the British central bank's monetary policy committee showed that the nine-member panel voted unanimously to cut its benchmark rate by a quarter point to 5.50 percent.

The Committee also discussed the possibility of cutting...