The pound has fallen to a five month low against the euro amid a rising claimant count and falling consumer confidence.
There is now €1.13 to the pound which is the lowest rate since April. The fall comes after figures from the ONS revealed the number of people out of work and receiving unemployment benefit rose by 5,300 in September to 1.47 million.
Meanwhile, Nationwide's latest Consumer Confidence Index fell to 53 for September, down nine points from August.
Mark Bolsom, head of the UK Trading Desk at Travelex Global Business Payments, says: "The UK jobs market is coming under pressure, consumer confidence is falling, inflation is still high and quantitative easing is being openly discussed.
"Added to that, the coalition's Comprehensive Spending Review is around the corner."
"The euro is much stronger because the European Central Bank are talking about exiting their ultra loose monetary policy. Unfortunately, the UK is a long way from that."
However, the pound has risen against the dollar, up 0.3% to $1.5755, after the US Federal Reserve minutes revealed it could be heading towards more quantitative easing.
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