The pound has fallen to a record low against the US dollar following UK Chancellor Kwasi Kwarteng's Mini Budget announcement.

Sterling slid by almost 5% to $1.035 when Asia trading opened on Monday (26 September), surpassing the then record lows hit on Friday (23 September) immediately after Kwarteng introduced the biggest tax cuts in 50 years.

Since then, sterling has been declining, increasing concerns that sterling would reach parity with the dollar.

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Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said the pound's "fast downwards track of a rollercoaster" reflected a lack on confidence in the government's economic management, which she said, "continues to evaporate".

Streeter added that "the fresh bout of panic appears to have been brought on by rumours that the Bank of England may step in with an emergency rate hike to try and shore up support.

"But comments by Chancellor Kwasi Kwarteng that he will go even further with historic tax cuts, which are already being criticised as reckless, have added to the anxiety."

Streeter said a big concern now is that this will  "balloon" borrowing to "eye watering levels" and "the fires of inflation will be fanned further by this tax giveaway, which offers higher earners the bigger tax break".

Sterling's slump also causes import issues, as the price of commodities and goods will become even more expensive.

Amid an ongoing cost-of-living crisis this put even greater pressure on individuals already facing a tough time.

Streeter said: "There is now a tense stand-off between the Bank of England and the Treasury, with policymakers determined to try and bring down inflation by dampening down demand, while politicians are focused intently on trying to boost demand and promote their growth agenda.

"The pound has now stabilised at around $1.05 but all eyes will be on the currency pair as trading begins in Europe this morning. The strength of the dollar is exacerbating sterling's weakness, with the flight to the safety of the greenback continuing amid worries about a slowing global economy.''