Pound Hits Record Low After Tax Cut Plans

Category: Business News

 

The pound has fallen to a record low against the dollar as markets react to the UK’s biggest tax cuts in 50 years.

In early Asia trade, sterling fell close to $1.03 before regaining some ground to stand at about $1.06 on Monday morning, UK time.

Chancellor Kwasi Kwarteng has promised more tax cuts on top of a £45bn package he announced on Friday amid expectations borrowing will surge.

The pound has also been under pressure due to strength of the dollar.

The euro also touched a fresh 20-year-low against the dollar in morning Asia trade amid investor concerns about the risk of recession as winter approaches with no sign of an end to the energy crisis or the war in Ukraine.

If the pound stays at this low level against the dollar, imports of commodities priced in dollars, including oil and gas, will be more costly.

Other goods from the US could also be considerably more expensive.