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The significant demise of the Labour party across the country, coupled with the widespread cries for Gordon Brown to stand down as prime minister, has resulted in the pound falling down 0.93 per cent against the US dollar and 0.11 per cent against the euro by 10.10am today.

As it stands, the markets are trading at $1.58 and €1.14 to the pound.

The European elections last night sent shockwaves through British politics as the British Nationalist Party (BNP) gained two seats - the first time the far right party has won any seats at a national election.

Labour came in third place after the Conservatives and UKIP, with just 15.3 per cent of the vote, the party's worst election result since World War II.

Mark O'Sullivan, director of dealing at London-based foreign exchange trader Currencies Direct, said: "Following Labour's resounding defeat in the European elections and the continuing uncertainty over Gordon Brown's future, sterling has slumped below the important psychological barrier of $1.60.

"Until the currency markets get clarity on the PM's future then sterling will continue to sell. And with little economic data scheduled for release this week, it seems that sterling’s fate will once again be decided by the week's political wrangling."