Sterling saw losses yesterday against all major currencies as prime minister Tony Blair faced political crisis with seven government members resigning.

With the PM's future in doubt the pound fell to $1.88430, 219.85000 yen and €1.46950.

Mr Blair was yesterday pushed to set a timetable for the transition to a new leadership with the Sun claiming the PM would be out of office by July 2007 and meetings with chancellor Gordon Brown said to be "acrimonious".

Mr Brown has refused to comment on recent events.

It is expected that the PM will outline his plans to leave office later today with him staying in power until the Labour party conference next autumn, by which time his successor will have been chosen.

Of the seven members of the government to resign, the most senior was Tom Watson, a junior defence minister, the others being parliamentary private secretaries - the lowest rung on the ministerial ladder.

Sterling also suffered yesterday with the Nationwide consumer confidence index falling nine points to its lowest level in two and a half years.

However, manufacturing and industrial output data showed growth in line with expectations at an annual rate of one per cent.