According to analysts, the British pound has slipped against the US dollar over the past year, hitting a 37-year low against the greenback last week and could weaken further. Sterling traded at $1.1403 on Wednesday amid rising concerns over the dollar’s strength and Britain’s economic outlook – a level not seen since March 1985. According to Refinitiv data from 1972, this is only the fourth time the currency has reached the level of $1.14. The pound has since recorded some downside and was trading at $1.157 against the dollar in London on Friday afternoon. “If you look at sterling since the start of the year against other G-10 currencies, it has clearly not only lost the most ground against the dollar, but it has actually lost the most against almost every other currency within the group. The competition has lost ground. Well,” Sonja Maarten, chief forex strategist at Germany’s DZ Bank, told CNBC Pro. “The only weak currencies are the Swedish krona and the Japanese yen. So, it is certainly not only a question of dollar strength, but also sterling weakness.” The pound’s relentless fall this year reflects the enormous challenge facing the new government of Liz Truss at a crucial moment for the British economy. Inflation in Britain is at a 40-year high, with the consumer price index reaching 10.1% in July from a year earlier, amid Britain’s worst life crisis in decades. Six consecutive rate hikes by the Bank of England – including an increase of 50 basis points last month, its biggest increase since 1995 – have so far failed to contain inflation. And Truss’s economic agenda, which includes a pledge to cut taxes and review the Bank of England’s mandate, has also put him on a collision course with the central bank, causing market panic and killing sterling. Expectations of further decline Now, market watchers say that the pound has to slide further down. “I think it can go further,” Marten said. She says the pound has the potential to hit $1.10 against the dollar if “things go bad”. “In the short term, if things go bad, and that means Liz Truss is not managing to gain investor confidence by announcing how she is going to finance her spending and if the Bank of England mandates has been touched. And the whole situation with energy prices remains the same,” he said. “We went from $1.23 to $1.15 in just two weeks, so I won’t rule it out. This is a currency pair that tends to move with a lot of volatility.” Read more Wall Street Pro predicts when the S&P 500 will rally — and reveals how to trade it This chip stock has outperformed its peers this year — and analysts agree This high uranium may be ‘on a tear’ right now. Here are two ETFs to play it out, Stephen Gallo, European head of FX strategy at BMO Capital Markets, doesn’t see “much relief” for Sterling in the near term, even as the Bank of England picks up pace with rate hikes. “The way we see it, the UK economy is already headed for some form of hard economic landing. While a loose fiscal policy setting may lessen the blow in that regard, it could lead to economic overheating and a boom. -bust also carries the risk of cycles,” he said. Said in a note. He added in an interview with CNBC Pro, Sterling’s weakness this year is largely driven by structural factors. Gallo cited a clear peak in the dollar, a considerable cooling in inflation rates in Europe and the apparent decline of the war in Ukraine as necessary conditions for sterling to recover. Therefore, he sees sterling trading in the range of $1.15 to $1.18 in the near term. Meanwhile, Chang Wei Liang, forex and credit strategist at DBS Bank in Singapore, believes that the pound will “mov around the $1.14 and $1.15 levels.” “We believe current levels are subject to the BoE continuing to raise interest rates to reduce inflationary pressures in the UK,” Chang said.