The pound is continuing to recede from recent highs against the euro following further evidence of high UK borrowing

Sterling continued to lose ground to the euro yesterday as UK borrowing data underlined Britain's deteriorating finances, while a sell-off in high-risk currencies also kept the pound under pressure.

• Data revealed a much larger UK budget deficit for October than the market had anticipated. The figure came in at £11.4 billion, against a predicted rise of just £6.7 billion, which undermined demand for the pound.
  
• Underlining Britain's enormous debt burden and shaky recovery, the Organisation for Economic Co-operation and Development said yesterday that the UK needed a concrete plan to cut its ballooning budget deficit, while downgrading its 2009 GDP forecast.
  
• Data also revealed that UK retail sales rose at a rate of 0.4% in October following two months of stagnation. The figure took October's annual sales growth to its highest since May 2008, however the news was overshadowed by the budget deficit.
  
• Sterling was also under pressure following as investors broadly sold off risky assets in the wake of falling global equity prices.
  
• In trading this morning there is has been little change from the overnight closing price, though ECB President Trichet gives a speech at 10:30, which could lead to some market movements.