Sterling falls to lowest since June 2020 versus dollar

Sterling fell below 1.23 for the first time in nearly two years against a strengthening dollar on Friday, after a plunge in the previous session as the Bank of England warned about recession risks, dampening expectations about future monetary tightening.p

pPolitical news also proved to be a headwind for the pound as British Prime Minister Boris Johnsons Conservative Party lost control of traditional strongholds in London and suffered losses elsewhere in local elections as voters punished his government over a raft of scandals.pdivdivdiv classBodysc17zpet90 cdBBJodiv

p“Signs that the BoE may be close to the top of its tightening cycle suggest sterling may be vulnerable as trading partners including the US and the eurozone push ahead with tightening cycles,” ING analysts said.p

pThe pound fell 0.5 against the dollar to its lowest since June 2020 at 1.2276. It fell more than 2 versus the dollar on Thursday.p

pIt was flat against the euro at 85.35 pence.p

pThe Bank of England sent a stark warning that Britain risks a doublewhammy of a recession and inflation above 10 as it raised interest rates on Thursday.p