Sterling fell below $1.30 to an 11-day low on Friday after Bank of England Governor Mark Carney said there was an “uncomfortably high” risk of Britain leaving the European Union without a 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 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 $1.2975 , 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.