The pound has fallen to a record low against the euro,

as dealers expect more Bank of England (BoE) interest rate cuts in 2008. The pound bought just one euro 37.6 cents in quiet Christmas Eve trading. "There are increasing signs that the British economy has hit a brick wall triggered by the decline in the housing market," said analysts at BNP Paribas. The European Central Bank (ECB) president Jean-Claude Trichet's recent comments have also boosted the euro. In an interview with the Financial Times, Mr Trichet hinted that the ECB was more worried about inflation than economic growth. He said that interest rate cuts in the US and Britain should not distract the ECB from tightening its monetary policy. "Other colleagues are in a different situation," Mr Trichet said. Britain's record trade deficit has also helped push down the value of sterling.

Paparazzi throng for Sarkozy trip

Photographers were stalking the Egyptian resort of Luxor, after Nicolas Sarkozy arrived there to holiday with his new girlfriend, former model Carla Bruni. Holding hands with Ms Bruni, the French president waved at onlookers as they arrived at their luxury hotel. But security was tight with plainclothes guards deployed in the town and two journalists were briefly detained on Monday night after filming the hotel. Mr Sarkozy, 52, divorced his wife of 11 years, Cecilia, in October. He was first pictured in the French media with Ms Bruni, 39, in mid-December during a visit to Disneyland Paris. The former model, who has been previously linked to men including Mick Jagger, Donald Trump and Eric Clapton, began a career as a singer after quitting the world of fashion. The couple travelled to Egypt in an entourage reportedly including friends and relatives. They arrived on a private jet, courtesy of Mr Sarkozy's friend, the French billionaire Vincent Bollaire. Mr Sarkozy was then due to make a formal state visit to Egyptian President Hosni Mubarak in Cairo before flying back to France to see in the New Year.

Final curtain for Cold War frontiers

Old Cold War frontiers, once guarded by guns and barbed wire, were consigned to history recently, as nine mostly former Soviet-bloc states joined Europe's border- free zone; the former Communist countries plus Malta joined the 15 existing Schengen states to create passport-free travel across an area one third the size of the USA. Redundant border posts were ceremonially cut up, and people were able to walk freely across frontiers which one divided the Soviet bloc from the West. The Schengen zone is named after the village in Luxembourg where passport-free travel was first agreed in 1985. With its expansion to 24 states, the area covers around 400 million people. It's expected to boost business and tourism, though critics predict an equal rise in cross-border crime and illegal immigration. Britain and Ireland remain outside the agreement, and continue to check passports. Cyprus has asked for a year's delay, while EU new boys Romania and Bulgaria have yet to meet security level.

EU wine reform to start next August

EU farm ministers have reached a deal on reforming the bloc's wine policy. Winemakers will be subsidised for digging up their vines over three years. To end the vast surpluses of unsellable wine and help EU wines compete against cheaper New World rivals, EU Agriculture Commissioner Mariann Fischer Boel backtracked over many of her reform plan's original elements in the face of fierce resistance from key EU wine producers. The European Union is the world's top producer, consumer, importer and exporter of wine, but home produce that finds no buyer receives public money to distil the surplus into industrial alcohol or biofuels. These subsidies will now be phased out over four years. Sugar may continue to be added to wine during production, subject to conditions. The reform will start in August this year.

Ministers reach fish deal while stocks last

The European Union's fisheries ministers have agreed on next year's catch quotas. Cod, again, was the most important fish fought over. The cod quota for the North Sea was raised by 11 percent. Conservation groups condemned this because stocks are low. But scientists had indicated a slight improvement in North Sea fish numbers. In most other areas the quotas will be set 18 percent lower. European Fisheries Commissioner Joe Borg had wanted a cut of 25 percent in most cod quotas for 2008. Borg said: "The decision taken will ensure that the fishing pressure put on some commercial stocks by the European fleet continues to decrease. This is necessary to ensure the future of European fisheries." According to Greenpeace, European data shows that catches since 2003 have, on average, been set around 50 per cent above the scientifically recommended level. The ecologist activists this week called for environment ministers to take on the fish quota dossier, seriously questioning the fisheries ministers' competence

EU Treaty main points

Here are some of the main points of the European Union's new Treaty of Lisbon: It incorporates the key reforms in the constitution but it discards the name. The Charter of Fundamental Rights becomes legally binding - in all the member states except Britain and Poland, which negotiated exemptions. There is also a provision that if a million citizens petition the European Commission, it will propose legislation in the field concerned. A new foreign policy chief with EU staff will give the bloc a greater say on the world stage. The High Representative will answer to EU governments and be a vice-president of the European Commission, with power over the EU external aid budget. A NATO-style mutual defence clause in case one of the member states is attacked is another of the foreign policy features. Voting at the member state level will be based on a "double majority" system, from 2017. A decision, to pass, will need 55 percent of the countries' support. At the moment this means 15 of them. These have to represent 65 percent of the EU's population. The Ioannina decisional delay provision especially important for Poland - in lieu of greater voting weight - becomes valid at this time. The redistribution of seats in the European Parliament has been adjusted under a reform agreed in the assembly. This reshuffle for an enlarged EU reflects population changes. The treaty raises the total number of seats to 750 but it does not count the parliament's president. Like the constitution, the treaty aims to streamline the number of members in the EU executive college, or European Commission. It says the number of commissioners will be reduced from 27 to 15 by the year 2014. Its head will be named according to the results of European elections, this needing endorsement by a parliamentary vote. The EU leaders will choose a president of the European Council for a 2-1/2 year renewable term. This does away with the current six-month rotating presidency - today assumed by a country. In the future an individual will chair the agenda and summits. Also left out is the flag commonly associated with the EU, formerly the European Communities, which adopted the banner in the 1980s. The Lisbon Treaty also makes no mention of the anthem symbol, 'Ode to Joy'

EADS goes European for plant sell off

EADS, the parent company of planemaker Airbus, has picked European buyers for six plants it is selling and rejected proposals from US aerospace firm Spirit AeroSystems. Airbus insisted that politics had nothing to do with the decision and that the three European firms had come up with better offers commercially and technically. EADS is talking with British engineering and cars parts group GKN for a full sale of the Filton plant in south west England where wings and sub-assemblies are made. For the two factories in France EADS would form joint ventures with French firm Latecoere and there would be partnerships with Germany's MT Aerospace for the two plants there.The factories concerned employ a total of 9,400 workers and the various unions have held demonstrations fearing job cuts. The sales are to reduce costs because of losses from delays to the A380 superjumbo

EastEnders tops Christmas ratings

The BBC scored a festive ratings success with nine of the 10 most watched TV programmes on Christmas Day, according to overnight viewing figures. The second half of an EastEnders double bill was top show - with a peak of 13.9m viewers watching as Stacey and Max's former affair was discovered. Dr Who was second on 13.8m, while the return of To The Manor Born got 10.1m. Coronation Street was ITV1's sole Top 10 entry, with a peak of 9.6m, as it went up against Strictly Come Dancing.

£500m revamp plan for Longbridge

Some 6,000 workers lost their jobs when MG Rover Longbridge collapsed in April 2005, but up to 10,000 jobs could be created and 1,400 homes and a shopping centre built to renovate part of Birmingham affected when the car plant closed down. Now a total of £500m could be spent if the 15-year plan goes ahead. Government ministers have already outlined plans for a £20m innovation centre in the area which will make up part of that redevelopment.

The plans are being developed by Birmingham City Council, Worcestershire County Council and Bromsgrove Council. Council leaders said they hoped the 15-year transformation of the area would encourage more people back to Longbridge. Under the plans Longbridge railway station would also be revamped and Bournville College would also be relocated to the area. A museum called the Austin Heritage Centre has also been proposed, which would celebrate the area's history in car-making. Worcestershire County Council leader George Lord said: "Longbridge is not only the biggest regeneration project in the Midlands, but one of the most important. "The eyes of both our residents and the nation will be on us so we are determined to succeed."

Councillors are expected to officially back the plans over the next few weeks then the proposals will be sent to the government for approval. Birmingham City Council leader Mike Whitby said: "Reinvigorating Longbridge's industrial heritage while also attracting new hitech investors and companies will also play an important role in cementing the area's status as the real engine room for a prosperous and ever-growing Midlands economy, able to compete on an international stage."

Girl, 7, in fatal quad bike crash

A seven-year-old girl died after her quad bike was involved in a head-on collision with a Range Rover in Essex. The crash occurred in Fingrith Hall Lane, just outside the village of Blackmore, on Wednesday evening. The girl, who lived locally, was taken to Broomfield Hospital in Chelmsford, where she later died from her injuries. A 28-year-old woman who was driving the Range Rover was arrested on suspicion of causing death by careless driving while unfit through drink or drugs. The woman, from the Brentwood area, has been bailed until New Year's Eve.