The UK pound fell to a new low against the euro in recent trading, ending up at one point at €1.1391. The fall was pushed by a selloff the currency as fears of a long recession drove traders and speculators. The pound has sunk nearly 20% against the euro in the past year as UK and is also down by more than 25% against the dollar since the summer. It was trading at $1.48 at one point compared to a recent peak of $2.11 earlier in the year
The National Institute for Economic and Social Research predicted recently that the UK economy would shrink in the fourth quarter of 2008 by at least 1 percent. Other factors have help to drive the pound lower, including the longest decline in manufacturing in years and the downturn in the housing market.
Some analysts are predicting even more falls in the economy for 2009, though many also believe that attempts by the Bank of England to kick start the economy with interest rate cuts will help. The falling pound will make it more difficult for Brits to purchase overseas property; at the same time, it will be easier for international buyers to get their English property.
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