The pound has fallen to its lowest level against the dollar since 1985, as the spread of the coronavirus pandemic spooks investors.
It is currently trading at $1.15, a fall of almost 5% in just one day.
It comes as financial markets tumbled again after major stimulus plans failed to quell fears about the economic impact of the virus.
The FTSE 100 index of top UK firms closed down 4%, with aerospace and travel firms among the hardest hit while Dow and S&P 500 fell more than 7% in early afternoon trading, triggering an automatic temporary halt to trade.
The pound’s weakness could partly stem from questions over how the UK government plans to pay for the emergency economic measures it has introduced, says Neil Wilson, chief analyst for Markets.com.
“This is the worst sustained period of sterling selling that I can recall,” he says. “The government’s massive fiscal package undoubtedly means more borrowing for the UK economy – how do we pay for all this?”
