World Economy

Sterling at 31-Year Low

Sterling at 31-Year LowSterling at 31-Year Low

Britain's pound has dipped to a level not seen since June 1985. The currency has experienced a rough ride ever since the UK's vote to leave the European Union, leading to significantly less foreign investment, DW reported.

Sterling hit a 31-year low of $1.268 shortly after trading started Wednesday before recovering to over $1.27. The pound also fell as much as 0.4% to 88.31 pence per euro before clawing back some ground later in the day.

The pound's further drop came amid fears of a hard Brexit. Sterling had been pummeled for weeks over worries that the UK would prioritize curbing immigration over promoting trade in its divorce from the EU.

The result of those fears had been a drop in foreign investment and cutbacks by banks and other global companies. "Sterling has finally and belatedly responded to the heightened and prolonged Brexit uncertainty, notwithstanding a resilient UK economy and prospects of significant UK fiscal stimulus," Amplifying Global FX Capital's Greg Gibbs said in a statement.

"The outlook remains negative, but it's risky to jump on the selling bandwagon," he warned.

Sterling skidded more than 1% Tuesday on the back of Prime Minister Theresa May's announcement on Sunday that the formal process that will take the UK out of the EU will start by the end of March.

She said today it was important to set out the timing of Britain's exit from the European Union to reassure businesses after sterling plunged in the wake of her announcement of the deadline.

It also hit a three-year low of 87.51 pence against the euro–down 0.2% on the day.

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