Pound falls to lowest level against dollar since 1985

Sept. 16 (UPI) -- The British pound sank to its lowest level against the U.S. dollar in nearly four decades on Friday, after renewed fears of a recession for the UK economy.

Sterling fell all the way down to $1.1353 during early morning trading, the first time it broke below $1.14 since 1985.

The fall was triggered by data released Friday that showed a 1.6% drop in retail sales during August, which was far larger than what economists had planned on. The data has led to increase speculation that the UK economy could be heading into a recession.

The fall in sales last month was broad-based, with petrol stations, supermarkets, clothing and furniture stores all experiencing a drop, the Office for National Statistics said, according to the Guardian.

A consumer slump could limit the Bank of England's ability to hike interest rates, even as it battles double-digit inflation.

"The UK consumer base is weaker, meaning it may be deemed too risky to inflate rates at the same pace as our trans-Atlantic friends, which would keep up the downward pressure on the pound," Hargreaves Lansdown's lead equity analyst Sophie Lund-Yates said, according to Business Insider.