LONDON, Oct 2 Reuters The pound fell slightly 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 0.14 at 1.2188. Last week it fell to its lowest level since March at 1.2111 before picking up slightly, but it is still up 0.8 for the year.

The euro was roughly flat against the pound at 86.66 pence. The euro zone39;s currency picked up against the pound last month, but remains around 2 lower since January.

There was little in the way of economic data to move markets on Monday although figures showed that British house prices in September were 5.3 lower than a year earlier. Prices were unchanged monthonmonth.

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.

Investors have sold both the pound and the euro as the economic outlook in Europe has darkened after their respective central banks hiked interest rates sharply to tame inflation. Meanwhile, the dollar has rallied on the back of a strong U.S. economy and rising bond yields.

I think the UK is in a very difficult place, said Jamie Niven, senior fixed income portfolio manager at Candriam. If there39;s one area where I think recession is more likely than not, it39;s the UK.

Investors will be keeping an eye on the ruling Conservatives39; party conference in Manchester this week.

Finance Minister Jeremy Hunt is due to…