Sterling declines to 37-year nadir ahead of Bank of England's policy decisions

Sterling fell in European trade to 37-year lows against dollar, sharpening its decline for the third straight session ahead of Bank of England's monetary policy decisions. 

Dollar hit fresh 20-year highs against major rivals after the Federal Reserve hiked interest rates ti 2008 highs, while preparing for more rate hikes until March 2023. 

GBP/USD fell over 0.4% on Thursday to 1.1212, the lowest since 1985, after losing 1% yesterday due to complete dollar dominance over rivals. 

Bank of England

Bank of England is expected to increase interest rates by 50 basis points today to 2.25%, the seventh such increase in a row. 

The meeting comes amid warnings that the UK might already be in recession, with retail sales falling past estimates in August, as retail sales represent the consumer economy. 

The Dollar

The dollar index rose 0.3% on Thursday for the third straight session, hitting 20-year highs at 111.81 against a basket of major rivals. 

The gains accelerated after Russian President Vladimir Putin announced military mobilisation to support the war effort in Ukraine. 

Dollar also emerged as a favorite investment after the Federal Reserve hiked rates by 75 basis points for the third meeting in a row to 3.25%, the highest since 2008. 

The world's largest central bank asserted the path of policy tightening and rate hikes until March 2023 in an effort to rein in record inflation.