Another round of gloomy economic news sent the pound plunging as a shock fall in manufacturing activity saw it drop below 1.50 US dollars for the first time in more than two-and-a-half years.
Sterling touched 1.4999 at one stage before edging back up as an industry survey signalled the first drop in manufacturing activity since last November, reigniting fears that Britain is heading for a triple-dip recession.
The pound also fell 0.5% to just below 1.16 euro as experts said the grim Markit/CIPS purchasing managers' index (PMI) increased the likelihood of more economy-boosting measures from the Bank of England ahead of its March rates meeting.
Sterling has taken a hammering in recent weeks, with Moody's decision to strip Britain of its prized AAA rating last Friday hitting it particularly hard.
Jeremy Cook, chief economist at foreign exchange company World First, said the pound had now overtaken the Japanese yen as the G10 currency which has fallen the most so far this year.
Prospects of further Quantitative Easing (QE) from the Bank has kept the pound under pressure after it was revealed that Governor Sir Mervyn King was one of three policymakers that wanted to increase QE by £25 billion to £400 billion at the February rates meeting.
Experts believe the Bank will hold off from more QE action until the second quarter, but said the Monetary Policy Committee may pull the trigger at its meeting next week if Tuesday's PMI survey figures from the crucial services sector also disappoint.
Mortgage data from the Bank of England added to the gloom on Friday, revealing that approvals for home buyers dipped in January for the first time since the Funding for Lending scheme was launched last August.