The pound has slumped to an all-time low against the dollar after Chancellor Kwasi Kwarteng hinted at more tax cuts to come after after last week’s Budget.
Sterling tumbled almost 5pc to as low as $1.0327 in overnight trading, taking it below its 1985 low to the weakest since decimalisation in
It clawed back some ground to about $1.05, but the sharp decline has fuelled fears it could slump to parity by the end of the year.
Highlighting the dire outlook, the pound fell against every single other currency in the world, from the Albanian lek to the Zambian kwacha.
The latest fall makes sterling the worst-performing G10 currency in the year so far.
The euro also hit a fresh 20-year low amid recession and energy security fears and on signs Italy's far-right alliance is on track to take power.
The Chancellor has brushed off questions about the markets' reaction to his mini-Budget – which outlined the biggest programme of tax cuts for 50 years – after it was announced on Friday.
The measures, which include scrapping the additional rate of income tax and cutting stamp duty, are aimed at fuelling economic growth.
But markets have been spooked amid fears Prime Minister Liz Truss is pushing up public borrowing to unsustainable levels.
Mr Kwarteng rattled traders further yesterday by saying there was “more to come” on tax cuts.
The sharp decline in the pound has fuelled speculation that the Bank of England could be forced to step in with an emergency interest rate rise ahead of its next meeting in November.
From the telegraph
