Struggling pound continues slide

The pound has been battered by fears of a prolonged recession in the UK

Sterling continued to slide amid persistent concerns about the UK economy, trading close to record lows against the euro and the dollar.

Measured against a basket of currencies used by major trading partners, the pound is now at a 13-year low.

The pound hovered near a six-and-a half year low of $1.4555 and traded at 85.40 pence against the euro, also close to a record low of 86.62 pence.

Sterling has fallen sharply in recent weeks amid fears about a UK recession.

Investors' conviction that the UK will suffer more in a recession than the eurozone - and UK rates will therefore fall further to spur growth - has contributed to sterling's dismal run.

Risk aversion is very high and comments from policymakers at the G20 meet could set currencies off again Philip Shaw, Investec Why US holidays have got dearer

"We're seeing more sterling weakness across the board due to aggressive rate cut expectations, " said Lee Hardman, a currency economist at Bank of Tokyo-Mitsubishi UFJ.

Last week, the Bank of England cut the UK base rate by 150 basis points, or 1.5 percentage points, to 3%.

Analysts were also nervous about the outcome of the G20 meeting of leaders of developed and emerging economies, which is scheduled to take place this weekend in Washington.

"Risk aversion is very high and comments from policymakers at the G20 meet could set currencies off again," said Philip Shaw, chief economist at Investec.