Sterling fell to a three-week low against the dollar on Tuesday and lost some ground versus the euro after Bank of England data showed UK mortgage lending growth fell to its lowest in three years.
Taken together with an unexpectedly small rise in consumer credit the figures showed UK consumers were reluctant to spend and signalled more interest rate cuts could not be ruled out.
"Sterling is a little shaky and the market is trying to push it lower against the dollar and the euro," said Peter Fontaine, currency analyst at KBC in Brussels.
"It does show that the Bank of England is a bit too optimistic regarding the data and a reality check needs to be done."
The pound fell as low as $1.7834, its lowest level since August 9, before rebounding to around $1.7850 by 1400 GMT. Sterling also weakened some 0.2 percent on the day to 68.23 pence per euro.
"Sterling had some further weakness in data but in terms of the euro, it needs to get beyond 68.35 for the pound to fall further," said Ian Gunner, head of foreign exchange research at Mellon Bank.