The pound reached its lowest point ever on Wednesday against the euro, largely because of high expectations that the Bank of England will cut interest rates on Thursday.

Lower interest rates often lead investors to use other currencies which have a higher rate of return. Most analysts are predicting a cut in rates from 5.25 to 5 per cent on Thursday.

At its lowest point the pound was worth as little a 1.25 euros, although it did rise marginally to equal 1.2552 euros.