The pound has slumped to a five-month low against the euro after Halifax’s house price index showed UK house prices plunged by 3.6% last month – the biggest monthly drop on record.

The Pound has since managed rally by just over 0.5% on news that the Bank of England have left interest rates at 0.5% and their Q.E. programme unchanged at £200 billion. The poor house price data has added to speculation that the Bank of England may consider additional stimulus measures to support the economy as the government prepares the biggest public spending cuts since World War 2. The Pound traded as low as 1.1360, the same level after the hung parliament was confirmed back in May.

Andy Scott, foreign exchange dealer at foreign currency exchange firm HiFX, said: “This apparent weakness in Sterling doesn’t tell the whole story though