House data pushes pound to record low vs euro

LONDON (Reuters) - Sterling hit a record low against the euro on Tuesday, dragged lower after a fall in a key house price index to a 30-year low suggested that the downturn in Britain's housing market is quickening.

The euro climbed nearly 0.5 percent to 80.48 pence after the Royal Institute of Chartered Surveyors said that its net balance of house prices deteriorated to -78.5 in the three months to March from -65.7 in February.

This was the lowest reading since the survey began in January 1978 and such a tumble prompted more worries that the housing market is continuing to suffer, which many in the market believe will take a significant toll on the broader economy.

Along with data showing that like-for-like retail sales fell in March, the RICS data suggested weakness in the economy may call for more monetary easing from the Bank of England, which cut rates by 25 basis points to 5 percent last week.

"This is a clear signal that things in the housing market are getting worse," said Ian Stannard, senior foreign exchange strategist at BNP Paribas.

"The mid-term trend in sterling is to remain lower," he added.

The figures hammered the pound across the board, pushing it nearly 0.4 percent lower to $1.9710, while on a trade-weighted basis, the currency traded at 91.8, matching an 11-year low.

Consumer inflation data for March due at 0830 GMT will show whether inflation remains high even as the economy suffers.

The Bank currently faces the problem of balancing an economic downturn, which warrants monetary easing, with the risk of rising prices, which puts upward pressure on rates.