Speculators are betting the UK’s pound will slide to a level that was virtually unthinkable in recent decades: $1 or less.

After the pound tumbled as low as $1.0350 Monday, the weakest on record, options markets show traders expect it to keep falling.

Three-month risk-reversal contracts against the pound are near the most bearish since 2016, while others show a 43 per cent chance it will hit $1 before the end of the year.

At the same time, analysts at banks including Morgan Stanley and Nomura International said they expect it to touch or cross that threshold.

“I think it’s going to get worse, unfortunately,” Jordan Rochester, a London-based strategist for Nomura, said on Bloomberg Surveillance. “I don’t want it to be worse. This is the country I earn my money in.”

The pound was higher against the dollar on Tuesday as the Bank of England and UK Treasury attempted to soothe market concerns after the government announced a raft of unfunded tax cuts.

“I think the statements from the Bank of England and the Treasury have helped the pound,” said Stuart Cole, head macro economist at Equiti Capital. The BoE will meet on November 3.