Sterling has fallen to its lowest rate against the Euro since the creation of the European single currency in 1999.

This is unwelcome news for any small UK firms that import from within the eurozone, but could help SMEs that export to this area as their prices become more competitive.

The euro briefly reached 82.09p against the pound, meaning that £1 bought just 1.22 euros. The European currency's third record high in the last month against the pound is a result of the Bank of England's interest rate cut of 1.5% to 3%.

"By cutting interest rates the attractiveness of sterling-dominated assets has fallen," said David Powell, G10 currency strategist at the Bank of America.

For the first time since the inception of the European Central Bank, UK rates are now lower than in the eurozone.