The British pound fell to its lowest level against the US dollar since 1985 on Wednesday.
The pound fell to $1.1407 in afternoon trading in London – a level not seen in 37 years – as investors reacted to the UK’s gloomy economic landscape with a new prime minister in charge.
British Prime Minister Liz Truss was officially appointed on Tuesday after succeeding Boris Johnson in a closely fought leadership race.
It inherits an economy on the brink of its worst cost-of-living crisis in a generation, with inflation reaching 10.1% in July.
The last time the pound fell to $1.14 was briefly in March 2020 and the Brexit result in 2016.
The $1.1407 level has not been seen since 1985, under Margaret Thatcher’s government.
The pound has been hit in recent months by rising inflation – currently the highest among all G-7 countries – and the prospect of a looming recession.
The appointment of Truss, who is widely expected to cut taxes and boost borrowing, has added to the concerns of the UK debt market.