The pound has slumped against the dollar again after Bank of England chairman Mervyn King said monetary easing measures could be taken soon.
Sterling fell 1.3 per cent against the dollar at $1.4195 by 09:05 GMT, according to data from Reuters, the lowest level in a week.
Several factors have contributed to the slide in the value of the pound, including Mr King's comments that the Bank may start 'quantitative easing', which means buying up assets directly to boost money supply.
David Lamb, head of treasury for No1 Currency, said: "Following the sharp rally of the previous two weeks, sterling has come under renewed pressure this week as risk appetite dries up and the Bank of England released their latest quarterly inflation report.
"The catalyst was renewed fears over the latest stimulus bill in the States and added to a dovish report from the Bank of England, sterling has shed around 50 per cent of the last fortnight's gains on the dollar and euro."
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