Sterling dropped below $1.14 for a few hours on Wednesday morning, pushing it below recent lows and taking it to its worst and lowest position since 1985.
The drop came after newly released retail figures showed a drop of 1.6 per cent in August, compared to the 0.5 per cent fall that economists had optimistically predicted.
“This morning’s retail sales in the UK continued to show a deteriorating consumption picture in the UK, which emerged more from the continuation of a steady downtrend from last summer rather than the single grim data point in a rather volatile series,” said Francesco Pesole, a currency expert at ING.
“This has been the last important piece of data before the Bank of England meeting on Thursday and has hit the pound this morning.”
The pound regained some ground in the early afternoon on Wednesday, but was still trading down around 0.5 per cent against the dollar, buying just over $1.14. The pound also lost 0.3 per cent against the euro...