Sterling fell towards recent three-week lows against the euro and dipped versus the dollar on Wednesday on news that a Bank of England Monetary Policy Committee member opposed this month's decision to keep interest rates at 4.5 percent.
Minutes of the December 7 and 8 meeting showed that Stephen Nickell wanted to cut rates to 4.25 percent because he thought that inflation was likely to undershoot its 2.0 percent target.
Cuts to the cost of borrowing tend to undermine sterling's yield potential - particularly against a backdrop of expected rate rises in Europe and the United States.
"We have had a little bit of a move driving euro/sterling higher. The BoE provided a little bit of a surprise, with Nickell voting for a rate cut ... undermining support for sterling," BNP Paribas senior foreign exchange strategist Ian Stannard, said.
A sharp rebound in British retail sales seen in data from the Confederation of British Industry failed to stem the falls, as the pound headed below $1.75 against the dollar.
Sterling had hit its lows for day against the euro at 67.93 pence - edging closer to Monday's three-week low at 68.17. By 1436 GMT, it was at 67.81, down 0.15 percent on the day.
The pound dropped half a percent on the day to $1.7445 against the dollar - last seen on December 9.
Calyon senior foreign exchange strategist Daragh Maher said that Nickell's dissent was the most significant development in the BoE minutes, coming after weekend comments from BoE chief economist Charlie Bean which the market had interpreted as dovish on rates.