April 25 Reuters Sterling fell on Monday to its lowest level since September 2020 against a strengthening dollar, while money markets scaled back their bets on future monetary policy tightening by the Bank of England BoE.

The dollar climbed to a twoyear high versus a basket of major trading partner currencies and was on track for its single biggest daily gain in more than six weeks as a wave of risk aversion swept through global markets, boosting the greenback39;s safehaven appeal.

Money markets are pricing around 150 basis points bps of BoE interest rate hikes by the end of this year, including more than 25 bps at next week39;s policy meeting, from 160 bps on Friday. IRPR

The BoE seemed mainly worried about risks of a possible recession and a slowdown in the labour market, analysts said after comments from BoE Governor Andrew Bailey last week.

Analysts last week pointed to risks of a possible political crisis as lawmakers triggered an investigation into whether British Prime Minister Boris Johnson had misled the country39;s parliament over gatherings at Downing Street during the pandemic lockdown. After apologising for his conduct, Johnson denied deliberately misleading parliament, a charge that would increase pressure on him to resign.

Optimism among British manufacturers in the three months to January fell at its fastest pace since the onset of the COVID19 crisis as orders slowed and prices jumped, a survey showed on Monday, adding to signs of an economic…