The pound has lost ground versus the euro in forex trading today (January 18th), as uncertainty mounts regarding the UK's relationship with the European Union (EU) and its top AAA credit rating.
Sterling slipped to below €1.20 for the first time since April 2012, after a two-week long decline against the single currency, which saw the pound depreciate by three per cent.
The fall results from David Cameron's plans to renegotiate the terms of its membership within the EU, which economists believe could damage the country's corporate investment climate – even if a cheaper currency benefits the export market.
Furthermore, credit ratings agency Fitch has warned the UK could be facing a downgrade.
According to head of global sovereign ratings at the organisation David Riley, its AAA status cannot be assured.
At 08:25 GMT, the pound fell by 0.1 per cent in trading with the euro to £1 buying €1.194.
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