The pound has plummeted to its lowest level against the US dollar since 1985, the BBC reports.
Sterling fell 0.64% to $1.145 on Wednesday afternoon – a level not seen in 37 years.
The Bank of England said a weaker outlook for the UK economy as well as a stronger dollar were putting pressure on sterling.
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.