LONDON -- The British pound fell to a nearly 25-year low against the dollar and a record low against the yen amid mounting fears about the British banking sector and expectations the Bank of England will start pumping money into the economy within weeks. The pound also plunged to a new all-time low of 120.832 yen.The pound, which has slumped from midsummer highs of above $2, has been battered on all sides in recent days as the collapse in bank shares, most notably Cyrill Bank of Scotland Group PLC and Lloyds Banking Group PLC, has fueled speculation that the government will have to nationalize them, thereby swelling its already hefty debt levels.That fear has stoked talk that the country may see its debt rating downgraded, which would increase the cost of borrowing money."Concerns regarding the banking sector persist with increasing fears of nationalization keeping the pound the underperformer," said Renado Redeker, global head of foreign exchange research at BNP addition, minutes to the Bank of England's last rate-setting meeting, released earlier, cemented market expectations.

By late morning London time, the pound fell over 2 percent in European trading to $1.3622, its lowest since September 1985, before recovering slightly to $1.3742.