As central banks raised interest rates to combat soaring inflation, the pound fell to a record 37-year low versus the US dollar on Friday, raising concerns among traders about the economy’s outlook.

Following the Bank of England’s Thursday increase in borrowing prices by 50 basis points, the value of the pound dropped as low as $1.1151, its lowest level since early 1985.

That came after the Federal Reserve raised interest rates by three-quarters of a point on Wednesday and hinted at further increases.

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Additionally, the dollar rose versus the euro, with the euro trading at $0.9753, a fresh 20-year low.

The Fed has taken a notably hawkish stance, stating it would not relent until the inflation, which is near four-decade highs, is controlled, even at the expense of the economy, while central banks around the world are raising borrowing prices.

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The focus of traders is now on London, where the new finance minister Kwasi Kwarteng is scheduled to present a mini-budget to assist individuals and companies.

On Thursday, Kwarteng announced he would repeal a recent salary tax introduced by his predecessor Rishi Sunak and would disclose the price tag for the new administration’s proposal to cap energy costs for both homes and companies.

It occurs when the Bank of England issues a warning that Britain is on the verge of entering a recession as a result of skyrocketing gasoline and food prices.