Sterling Slumps Amid Trade Tensions and Recession Fears

The British pound weakened against the dollar and the euro as fears of a global recession increased due to US tariffs. Investors moved towards safe-haven assets, betting on a rate cut by the Bank of England. Britain's softened demands on automakers echoed economic concerns.

The British pound faced significant losses against both the dollar and the euro on Monday, as apprehensions surrounding global trade policies heightened. Investor sentiment turned cautious amid fears of a potential U.S.-induced recession fueled by President Donald Trump's recent tariffs.

Sterling plunged to a one-month low, dropping to $1.2825, and further weakened against the euro and traditional safe-haven currencies including the Japanese yen and the Swiss franc. Investor speculation about the Bank of England's potential interest rate cuts has intensified, with expectations for a quarter-point reduction in May.

These economic tensions mirrored broader turmoil in global stock markets, pushing investors towards safer assets. In response to the economic landscape, Britain eased its demands on automakers to transition to electric vehicle production, highlighting the domestic impact of Trump's tariff strategy.

(With inputs from agencies.)