The pound has dropped to its lowest level against the euro since April as concerns are raised that UK public debt levels may not be sustainable.

The pound also dropped to its lowest level in three weeks against the dollar as the Bank of England cautioned that foreign investors may not be as willing to purchase UK assets.

Official figures released last week showed that the UK's public sector net borrowing totalled £16bn last month, the highest figure on record for August. The government's overall debt now stands at £804bn, over half of GDP.