The euro has continued to hit new record highs against sterling this evening. It soared to 93.01p against the British currency, having broken the 92p barrier only a few hours earlier. The euro later fell back to 92.7p.
The latest plunge in sterling came after more gloomy economic figures set off renewed speculation about further deep UK interest rate cuts in the coming months. Lower interest rates make a country's currency less attractive to investors.
The latest record was reached after new figures showed that UK unemployment jumped in November by the biggest monthly amount for more than 17 years.
It also came as minutes from the last Bank of England rate policy meeting showed that policymakers voted by 9-0 to slash UK interest rates earlier this month by a full percentage point to 2%. They had considered an even steeper cut, the minutes added.
The Bank of England had on December 4 cut its key lending rate from 3% to the lowest level since 1951, amid mounting evidence that Britain faces a deep recession.
The nine members of the BoE's monetary policy committee agreed that a steep rate reduction was needed to prevent annual inflation falling under the central bank's 2% target, according to the minutes.
As the euro and sterling edge closer to parity some British holidaymakers travelling to Europe are reportedly already receiving less than €1 for £1 at bureaux de change.
Sterling has lost more than a quarter of its value against the euro and the dollar over the last year. Earlier this week the pound crashed through the 90 pence level against the euro for the first time since the single European currency was launched in 1999.
