Pound reaches 14-month euro low
Published September 14th, 2007
The pound has briefly fallen to a 14-month low against the euro on fresh doubts over the UK economy’s resilience in the face of a global credit squeeze.
At one point, the pound was trading at 68.65p to the euro, after the Bank of England offered emergency help to UK mortgage lender Northern Rock.
The move has led to fears that other banks could have to seek similar aid.
To ease panic in the financial system, the Bank of England could delay raising rates, further hitting the pound.
The pound rose slightly to 68.88 pence in later trading, while the euro hovered just below record highs against the dollar set on Thursday.
The euro has gained momentum as currency investors bet that the European Central Bank will raise its key interest rate of 4% by December this year.
The move is expected as the central bank has made it clear that keeping inflation under control is a priority as the bloc’s economy continues to expand at a steady pace.
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