Sterling hits record low against the dollar, as Asia-Pacific currencies also weaken - CNBC

It's a "major challenge" for the Bank of England to fight inflation while the government tries to stimulate the economy, said Nicholas Ferres, chief investment officer at Vantage Point Asset Management.

"The Bank of England may even do an emergency policy meeting this week and hike rates, that wouldn't surprise me if that happened," he said.

The lack of commitment to fiscal discipline in the U.K., along with the strong dollar, led to the pound weakening sharply, said Saktiandi Supaat, FX strategist at Maybank.

dollar index has been rising strongly this year as the Fed raises interest rates aggressively.

and Japan have widened significantly as the Bank of Japan sticks to its ultra-low rates