Sterling slipped to fresh record lows beyond 75 pence per euro on Thursday, with market opinion swinging in favour of a quarter-point Bank of England rate cut later in the session. Expectations for a cut have been boosted by a raft of weak retail reports, including a poor set of earnings from Britain's biggest clothing retailer Marks and Spencer on Wednesday.

Markets are now pricing in around a two-in-three chance of the BoE following up last month's rate cut with a reduction to 5.25 percent on Thursday.

"Our view is that rates will be cut and I think that will continue the pressure on sterling if it were to happen," said Steve Barrow, currency strategist at Bear Stearns.

"Sterling is guaranteed to move whatever happens ... But given the sell off in sterling, and given the way that's market priced in a rate cut, it seems that sterling has more to gain from unchanged rates than it has to lose from lower rates."

The euro rose to 75.14 pence after breaching the psychological 75 pence level for the first time on Wednesday.The ECB also decides on rates on Thursday, but is widely seen leaving policy on hold at 4.25 percent.

Versus the dollar, the pound fell as low as $1.9542, its weakest since last March. On the BoE's trade-weighted basis, it opened at a 4-year low of 95.8 -- down around 2 percent since the start of the year after losing 6 percent in 2007. November trade data at 0930 GMT will present the last snapshot of the health of the British economy ahead of the 1200 GMT BoE decision.

Britain's global trade deficit is seen widening slightly compared to the previous month, to 7.23 billion pounds.

Source supplied by Reuters.