The currency declined the most in a week versus the euro as the Office for National Statistics said sales shrank 0.1 percent last month. The Bank of England signaled yesterday it’s prepared to cut interest rates further, after reducing the main rate 1.5 percentage points to the lowest level since 1955.
The pound fell to $1.4896 as of 1:06 p.m. in London, from $1.4952 yesterday, when it reached the highest level since Nov. 12. The U.K. currency is down 25 percent against the dollar this year. Against the euro, it weakened to 84.22 pence from 83.55 pence. It reached a record low of 86.63 pence last week.
Central banks around the world are discussing deeper reductions in borrowing costs as economies founder. Federal Reserve policy makers predicted the U.S. will contract through mid-2009, with some prepared to cut rates further, a record of their latest meeting showed yesterday. The Swiss National Bank cut its key rate 100 basis points to 1 percent today.
The Swiss franc dropped to the lowest level against the dollar since August 2007 after the central bank unexpectedly cut its key interest rate.
The franc also slipped versus the euro after the Swiss National Bank reduced its benchmark three-month Libor target rate by 1 percentage point to between 0.5 percent and 1.5 percent today after an unscheduled meeting. It said it would provide a ``generous and flexible supply of liquidity'' to meet the target.
The franc declined 0.4 percent to 1.2189 per dollar by 3:11 p.m. in Zurich, from 1.2138 yesterday. It dropped 0.6 percent to 1.5260 per euro, from 1.5165.