The British pound hit an all-time low against the euro on Monday for the second straight day, weighed down by a report about falling home prices and expectations that the Bank of England will keep cutting interest rates, according to AP. The euro rose to 72.710 British pence, compared with the earlier record of 72.350 pence from May 27, 2003, according to the daily reference rate of the European Central Bank. That was the lowest since the euro began trading on financial markets in 1999. Traders seized on data showing that house prices fell 0.3 percent in December from the month before, with the average property staying on the market for more than eight weeks, the longest since the Hometrack survey began in 2001. The Bank of England cut its key interest rate a quarter-point to 5.5 percent earlier this month amid fears the fallout from the U.S. subprime crisis would hurt economic growth by making it harder for companies and consumers to borrow money. Lower interest rates mean lower yields on some pound-denominated investments and can weigh on its exchange rate.
