The British currency declined to its lowest level versus the euro in almost a week after an index based on a survey of purchasing managers at building companies dropped to its lowest since the series began in April 1997.
The British currency weakened to 79.18 pence per euro as of 9:51 a.m. in London, from 78.79 pence at the end of last week. It slid to $1.9691 from $1.9750.
The Chartered Institute of Purchasing and Supply construction purchasing managers' index declined to 36.7 from 38.8 in June. Economists had forecast a drop to 37.5, according to the median of nine estimates in a Bloomberg News Survey.
Traders scaled back bets the Bank of England will lift its benchmark interest rate, with the implied yield on the December short-sterling futures contract dropping 4 basis points to 5.75 percent.
Bank of England policy makers left the key interest rate unchanged at 5 percent at the July 10 meeting after lowering it three times since November in a bid to stave off a recession in the face of accelerating inflation. It's scheduled to make its next interest rate decision on August 7.