LONDON (AFP) — The pound took another hit on Monday, falling to an all-time low against the euro and barely reaching $1.8 against the dollar.
The pound's weak performance came after the chancellor gave a bleak assessment of the economy ahead of a Bank of England interest rate decision due this week.
On Monday, the European single currency stood at 81.39 pence at one point -- the best level versus sterling since the euro's creation in 1999.
Against the dollar, the pound briefly fell to 1.8006 dollars, its lowest level since April 2006.
"It seems likely that investors will continue to shun the pound for some time to come," Simon Derrick, a currencies strategist at Bank of New York Mellon, told the Dow Jones Newswire.
"We are reminded once again that when the pound falls, it falls hard," he said.
Meanwhile, new figures showed that UK mortgage approvals slumped to a record low in July.
Chancellor of the Exchequer Alistair Darling warned over the weekend that Britain was facing "arguably the worst" economic downturn in 60 years and said it would be "more profound and long-lasting" than people had expected.
Darling also admitted in an interview with Saturday's Guardian newspaper that he had no idea how serious the credit crunch would become.
Darling's comments came after recent official data revealed that the British economy had recorded zero growth in the second quarter of the year.
The Bank of England is on Thursday expected to keep interest rates at 5.0 percent as Britain battles against both stagnant economic growth and soaring inflation.
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