The euro hit an all-time high against the pound this morning amid mixed signals over the UK economy and hawkish comments from the European Central Bank (ECB).

The euro touched 0.7924 against sterling by mid-morning and was expected to peak at about 0.8 during the day.

The pound was hit by the release of data showing consumer optimism running at a 15-year low.

The consumer confidence index from GfK/NOP fell another two points in March to -19.

Sentiment was not helped by the Nationwide house price survey, which revealed a 0.6 per cent monthly drop during March to bring the annual growth rate to only 1.1 per cent, the slowest since March 1996.

The UK current account deficit provided the good news, with an improvement to £8.5 billion in the fourth quarter from a record of £19.1 billion in the third quarter, much better than the £18.5 billion expected by analysts.

GDP growth, meanwhile, was confirmed at 0.6 per cent in the fourth quarter.

Hawkish talk from Axel Weber, the ECB rate-setter, gave renewed vigour to the euro.

Mr Weber suggested that the ECB would not cut rates any time soon and said that the current interest rate level guaranteed price stability.

German import prices surprised to the upside this morning, rising by 1.1 per cent in February from January, almost twice analysts’ forecast for an increase of 0.6 per cent.

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