After the pound slumped to an all-time low, traders are pricing in the Bank of England's rate hike by a total of 150 basis points by November. Accordingly, policy makers may raise the interest rate to 5.75 percent, the highest level since 2007, until May.
The currency sterling tested 1.0350, the lowest level since Bloomberg began keeping data, down nearly 5 percent against the dollar in 1971. The 10-year bond yield in the country exceeded 4 percent for the first time since 2010.
As part of the fight against inflation, BOE increased the policy rate by 50 basis points to 2.25% last week, thus bringing the policy rate to the highest level since 2008.