The pound fell to a new 37-year low against the dollar and UK borrowing costs hit their highest level in more than a decade as the government’s sweeping tax cut program and the windfall of borrowing risked losing the confidence of the financial markets.
Investors took fright at the prospect of unfunded tax cuts announced in the Chancellor’s budget statement, causing the pound to edge closer to its weakest point since before 1985. The pound was down 3.2% on against the dollar to hit $1.0895 after Chancellor Kwasi Kwarteng announced tax cuts. worth £140bn to drive growth. The pound fell to $1.05 in 1985 when the United States was forced into an international currency debasement pact.
The yield on UK benchmark 10-year bonds,