//
The UK currency, which has dropped by around seven per cent since the beginning of the week, was dragged down by banking shares.
Barclays and Lloyds Banking Group were among the big fallers, both seeing double-digit drops in early trading, reports Reuters.
Adarsh Sinha, currency strategist at Barclays Capital, said as long as British banking stocks are down, sterling will remain one of the dominant themes of the currency markets.
He commented: "Financial sectors in other countries are not doing any better than Britain, but sterling is an easier target because it is not a reserve currency such as the dollar or euro and thus more vulnerable to problems."
The fall in the pound has increased speculation that the government will move to increase its stake in UK banks through nationalisation.
