The exchange rate has dipped to its lowest level since November 2016 after a day of Brexit warnings.
GBP is buying €1.118, down from a weekly high of €1.142 seen late last week.
Sterling has been significantly impacted after comments from Bank of England (BoE) Deputy Governor Ben Broadbent out of Amsterdam yesterday.
The pound rose against the euro in the hours before his speech, as investors anticipated an update on the possibility of an interest rate rise.
But the Monetary Policy Committee (MPC) policymaker failed to address this topic.
Instead he warned a decrease in trade between Britain and the European Union would harm both economies.
Mr Broadbent also warned a reduction in trade after Brexit could cause prices to rise for the average shopper.
In a speech that focused on the benefits of globalisation, Mr Broadbent said less trade with the EU would damage Britain’s comparative advantage in exports of financial and business services.
At the same time, Britain would end up having to produce more of the things it currently imports from the EU and is less equipped to create.
This sentiment was further supported by Moody’s ratings agency, which forecast the UK economy to continue to stall.
Moody’s said: “The UK economy has started to slow, and Moody’s expects the UK economy to weaken significantly through the remainder of this year, with the baseline scenario seeing growth declining to 1.5 per cent this year and 1.0 per cent in 2018, compared to 1.8 per cent in 2016.”
TorFX currency analyst Laura Parsons said: “Tuesday was pretty grim in terms of the weather, and dark clouds also gathered over the pound.
“Brexit related warnings from both Bank of England (BoE) Deputy Governor Ben Broadbent and Moody’s ratings agency left sterling tumbling and GBP/EUR briefly dipped below €1.120.”
The exchange rate hangs on today’s release of UK employment data.
Ms Parsons said: “Poor wage figures would only add to sterling’s woes, but if average earnings increase unexpectedly the pound could make a plucky comeback.”
The pound has also dived against the US dollar, dropping to US$1.282 from a weekly high of US$1.297.