British pound falls to its lowest level against the dollar since 1985

The British pound fell to its lowest level against the U.S. dollar in more than 25 years.

The pound fell to a 37 year low in afternoon trade in London as investors responded to the U.K.'s darkening economic landscape with a new prime minister at the helm.

It was down 0.4% at the time of writing.

Liz Truss became the new British Prime Minister on Tuesday. Inflation hit 10.1% in July, making it the worst cost of living crisis in a generation.

The pound fell to $1.1444 in the hours after her victory, but has since fallen lower as traders understand the consequences of her appointment.

The last time sterling fell was during the Covid-19 low in March 2020 and the result of the referendum in the UK. Since 1985, the level has not been seen.

The lowest level of sterling traded against the dollar was in 1985.