The pound has hit its highest level against the euro since November 2008, the day after the European Central Bank (ECB) lowered its key interest rate.

The pound rose by almost a cent to 1.26 euros, making a euro worth 79.3 pence.

The euro has weakened against the pound during the eurozone debt crisis, while the ECB rate cut from 1% to 0.75% makes the euro less attractive to investors.

The euro has benefited in recent years from higher interest rates in the eurozone compared with the UK and US.

Rates in the UK are 0.5%, while in the US they are between zero and 0.25%.

Against the dollar, the pound fell slightly to $1.55.

"The eurozone has finally succumbed to intense pressure to cut interest rates to a record low as its debt crisis continues to curb global growth," said Harry Adams at foreign exchange group Argentex.

"Traders are selling the euro as it far less attractive to investors as it was six months ago."