UK pound falls to record low against euro

LONDON — Britain's pound fell to a record low against the euro on Wednesday as fears about the strength of the British economy grew.

The British currency dipped to euro1.1392 — a 1.3 percent fall from its high point on Tuesday, and the weakest it has ever been against Europe's shared currency since the euro was launched in 1999.

The record low comes on the same day that Britain's National Institute of Economic and Social Research, a leading think tank, published a report estimating that the country's economy shrank by a greater-than-expected 1 percent in the three months through November.

The report predicted that the pace of economic contraction would accelerate in the quarter through December, landing the country in a technical recession — defined as two or more consecutive quarters of negative growth.

"There's a lack of confidence in the U.K. economy," said Mark Deans, a dealing manager at foreign exchange trading company Moneycorp. "The figures out this morning have undermined that confidence even more."

The Bank of England has also sharply cut interest rates — a move that can weaken demand for a country's currency by reducing the yield on interest-bearing investments.

The lower pound raises costs for Britons when they travel to the 15 countries that use the euro, and raises the price of imported goods. But it makes the country's exports more competitive.

The pound was roughly flat against a broadly weaker dollar — gaining 0.4 percent — to $1.4812.