The British pound fell back towards six month lows against the dollar and the euro today.

Sterling traders are still nervous about a loss of momentum in the UK economy, the prospect of an interest rate cut and a new prime minister. 

Sterling recovered slightly at the end of last week, ending a nine week losing streak against the euro and inching away from the low of $1.2439 hit at the end of June. 

However, analysts are largely bearish on the currency after a run of poor economic data and signals from the Bank of England that its next move may be to cut interest rates rather than hike them, as it had previously flagged. 

Employment and wage growth data for the month of May tomorrow will show how the British labour market is holding up. Many economists expect the UK economy will have contracted in the second quarter.

Investors are also waiting for the outcome of the Conservative party leadership contest to replace Prime Minister Theresa May. 

Eurosceptic Boris Johnson is the favourite to win against Jeremy Hunt in a vote of Conservative party members. The winner will be crowned leader - and prime minister - by the end of July. 

Britain is scheduled to leave the European Union on October 31.

The pound weakened 0.2% to $1.2556 today, while against the euro it declined 0.2% to 89.785. 

Sterling had hit a six-month low of 90.10 pence per euro last week.