GBP slipped on Friday against the dollar, and headed for its worst week in a month, as investors sought safety in the greenback amid concerns over rising COVID-19 cases globally.

The pound fell 0.3% against the dollar at $1.3805, and was poised for a similar weekly loss, which if sustained would be its worst since mid-June. The U.S. dollar gained 0.1% against a basket of currencies on Friday.

The pound fell slightly against the euro to 85.53 pence, moving further away from 3-1/2-month highs hit earlier this week.

Solid U.S. data and a shift in interest rate expectations after the Federal Reserve in June flagged sooner-than-expected hikes in 2023 have lent support to the greenback in recent weeks.

Against a stronger dollar, the pound struggled to gain ground on the back of growing market speculation that the Bank of England could halt its bond-buying programme early because of an unexpectedly sharp rise in inflation.

Investors were having to balance the prospect of tighter BoE policy, which is supportive for the pound, with concerns about the economic fallout from the rapid spread of the COVID-19 Delta variant and from the end of fiscal support measures such as the job furlough scheme, which will end in September.