LONDON: The pound fell sharply on Monday, continuing a weak run that saw it drop 3.7% in September, its worst monthly performance in a year.

Sterling was last down 0.71% at $1.2115. Last week it fell to its lowest level since March at $1.2111 before picking up slightly. It is still slightly up on the year.

The euro was roughly flat against the pound at 86.6 pence, in a sign the dollar was driving the action on Monday.

The dollar index, which tracks the currency against six peers, rose 0.59% to 106.88, helped by data that showed the US manufacturing sector took a step towards recovery in September as production picked up and employment rebounded.

There was little major British economic data although figures showed that UK house prices in September were 5.3% lower than a year earlier. Prices were unchanged month-on-month.

The final reading of a closely watched UK manufacturing survey showed that activity continued to slow sharply in September, although less steeply than the month before.