Sterling slid to a four-week low versus the dollar on Thursday as the US currency rose broadly on growing speculation of monetary tightening from the Federal Reserve while fears on Britain's economy weighed on the pound.
Figures showing rising British unemployment on Wednesday were the latest in a series of negative economic data that has kept the pound on the back foot, seeing it fall from roughly $2.04 in mid-March to below $1.95. The pound failed to draw support from the growing speculation of increased interest rates from the Bank of England as data on Thursday showed inflation expectations soaring to a record high in May.
"There is some underlying sterling weakness," said Paul Robson, currency strategist at RBS Global Banking. By 1414 GMT the pound was trading down 0.9 percent at $1.9456, having fallen as low as $1.9438, its lowest since mid-May. The euro was steady against sterling at 79.25 pence.