The pound fell yesterday after official data showed GDP was to grow less than predicted.

At the beginning of the day sterling stood down at all major currencies at €1.47430, $1.86965 and 220.6615 yen.

The fall came as the Office for National Statistics revealed GDP rose 4.8 per cent over the last 12 months, compared with predictions of six per cent.

Slower growth takes off the pressure on inflation and means it is less likely that the Bank of England will increase interest rates this year, lest the economy be hit further.

In Europe, a pool of leading economists by Bloomberg suggests that eurozone inflation could drop below the European Central Bank's (ECB) target of two per cent, following falling oil prices

However, it is thought that the ECB will be unlikely to change from its tough stance on inflation as new German VAT increases in January are expected to draw inflation up again.