In European trade on Friday (Oct 21), / US fell sharply, temporarily trading at 1.1180, down 0.44 percent.
Deputy Governor Ben Broadbent warned of a shock to the economy if a big rise in interest rates materialised.
But it is not clear that the UK will need to raise rates as much as markets expect.
Broadbent spoke as UK inflation returned to a 40-year high.
Data from the Office for Statistics showed that the UK grew 10.1 percent year-on-year in September, returning to a 40-year high, above market expectations of 10 percent and up from 9.9 percent in August.
Core CPI, which strips out volatile food and fuel prices, rose 6.5 per cent year-on-year in September, also above expectations of 6.4 per cent and 6.3 per cent in August.
Stubbornly high inflation also puts further pressure on the Bank of England to raise interest rates.
GBP/extended losses below 1.1200 on political disappointment.
GBP/USD is extending its decline below 1.1200 following a disappointing 1.4% month-on-month fall in UK retail sales in September.
A stronger dollar as well as Treasury yields and risk aversion also weighed on both.
Focus on British politics.
