The divergence in policies between the Bank of England and the Federal Reserve has intensified, causing the British pound to drop to a 12-week low

The British pound fell to a 12-week low against the US dollar due to the Bank of England's cautious stance on interest rate hikes, contrasting with the Federal Reserve's tightening policy.

The Federal Reserve raised interest rates by 25 basis points last week and hinted at at least one more rate hike this year, strengthening the dollar. The Bank of England kept rates unchanged last week, causing the pound to drop by as much as 0.6%, reaching a low of 1.326 dollars.