The Pound sterling has plummeted to its lowest level against the US dollar since 1985, according to the British Broadcasting Corporation (BBC).
According to the corporation, Sterling fell 0.64 per cent to $1.145 on Wednesday afternoon – a level not seen in 37 years.
The Bank of England (BoE) said a weaker outlook for the UK economy as well as a stronger dollar were putting pressure on sterling.
BoE Governor, Andrew Bailey, also warned that little could be done to stop the UK falling into a recession this year as the war in Ukraine continued.
He added that it would “overwhelmingly be caused by the actions of Russia and the impact on energy prices.” The bank expects the economy to shrink in the last three months of 2022 and keep shrinking until the end of 2023.
The warning comes ahead of a government plan to limit a sharp rise in energy bills.
It is understood that a typical energy bill could be capped at around £2,500, with new Prime Minister Liz Truss set to announce the details on Thursday.
Currently, a typical household’s gas and electricity bill is due to rise from £1,971 to £3,549 in October.
Energy prices climbed sharply when lockdown was lifted and the economy started to return to normal. They have increased further as Russia sharply cut its gas supplies to Europe.
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