British pound falls to its lowest level against the U.S. dollar since 1985

The British pound on Wednesday fell to its lowest level against the U.S. dollar since 1985, CNBC reported.

In afternoon trading in London, the pound fell to $1.1407 -- a level not seen in 37 years -- as investors reacted to Britain's deteriorating economic situation with a new prime minister at the helm.

UK Prime Minister Liz Truss was officially appointed Tuesday, succeeding Boris Johnson. She inherited an economy experiencing the worst cost-of-living crisis in a generation, with inflation hitting 10.1 percent in July.

The pound fell to $1.1444 within hours of her victory on Monday, but has since fallen even lower as traders understand the implications of her appointment.