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 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.

Other goods from the US could also be considerably more expensive and British tourists visiting America will find that their holiday money does not go as far as before sterling’s slide.

There are also concerns that the tax cuts and a surge in government borrowing will stoke high inflation and force the Bank of England to raise interest rates even further. This would raise monthly mortgage costs for millions of homeowners.

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