Sterling fell below USD1.30 on risk of Britain leaving without deal
The pound was already under pressure after the BoE raised interest rates on Thursday because the central bank also signalled it was in no rush to tighten policy further.
With less than eight months until Britain leaves the EU, the government has yet to agree on a divorce deal with Brussels and has begun talking more publicly about the prospect of leaving the bloc without a formal agreement on how their future relationship should be structured.
The pound dropped 0.3 percent to an 11-day low of U1.2975, , close to the 10-month low of $1.2958. Pound weakness has coincided with a broad rally in the dollar this week.
Against the euro, sterling slipped 0.1 percent to 89.10 pence per euro.
The UK's Purchasing Managers Index survey for the dominant services sector is due at 0830 GMT. Recent data have shown some more strength in the UK economy but the sentiment remains fragile.
"We remain more hawkish than the market (the short-end rallied modestly yesterday) and see the next 25bp (basis point) move by the Bank being in February next year," George Buckley, UK economist at Nomura, said.
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