The British pound fell on Monday, with investors scrambling to protect their portfolios ahead of a second major downgrade to the central bank’s outlook.
The Bank of Canada cut its economic growth forecast for the next two years, and the Bank for International Settlements cut its forecast for economic growth in the second quarter.
The European Central Bank raised its benchmark interest rate from 0.25% to 0.50%, and the U.S. Federal Reserve cut its benchmark overnight interest rate to zero.
The pound dropped more than 1% to $1.0611 after the Fed cut its estimate of the U:1 ratio of inflation to 2.3% from 2.5%.
It’s fallen since the Brexit vote, but is still up around 3% in value.
The U.K. voted on Monday to leave the European Union and the euro currency, which had been a major asset for the British pound.
The vote to leave came after a prolonged, bitter campaign between Prime Minister Boris Johnson and Prime Minister Theresa May, the other main opposition party.
The vote had triggered a massive surge in the value of the pound, which fell to $0.8195 on the London Stock Exchange.
It’s been a year since the pound’s worst drop since the financial crisis.
The pound’s depreciation has helped fuel a rise in inflation, and some economists think it will be the catalyst for a second economic downturn in the U