THE pound continued to struggle against the euro today after a brief rally in early trading.

It followed the value of Sterling plummeting to a new record low against the Euro.

It tumbled as much as 2% to 97.98p per euro - its sixth straight decline and its weakest point since the single European currency's launch in 1999 - but climbed back slightly to 97.47p in later trading.

Today it was struggling again at 97.04p.

Many analysts believe the two currencies are likely to remain around parity in the New Year because of poor liquidity and the weakening UK economy.

However, they also contend the euro may be unable to sustain such lofty gains for any significant period of time, because it is already overbought against Sterling.

The pound's big drag yesterday came in the shape of further grim news about the UK economy.

An industry report from Hometrack forecast that house prices in England and Wales fell almost 9% this year, adding that the declines will likely be exacerbated next year.

Sterling's continued downward trend - plunging a record 17% this month alone - has also bolstered the view that UK interest rates, sitting currently at 2%, will be slashed further by the Bank of England at its policy meeting next month and that they will remain lower than those in the eurozone.

Members of the Bank of England's Monetary Policy Committee have hinted that the UK might follow the US and begin pumping money into the financial system once interest rates are cut to zero.

Adding to the gloom, new figures from the Chartered Institute of Personnel and Development warned that 600,000 UK jobs could be lost in 2009 as the recession bites deeper.