The British pound has dropped to an all-time low, following a promise from the treasury chief on Sept. 23 to make the biggest tax cuts in 50 years.
The pound fell to $1.0373 Monday (Sept. 26), before bouncing back slightly to $1.0672 by the time early London trading opened.
It’s lost over five per cent of its value against the U.S. dollar in just three days. The drop comes as the government intends to borrow and spend $60 billion pounds to aid those who are struggling to pay high energy bills, caused by Russia’s war with Ukraine.
Critics have called the move reckless, but Treasury Chief Kwasi Kwartengand Prime Minister Liz Truss say that putting more money into the pockets of Brits will spur economic growth. The country’s central bank also recently raised Britain’s interest rates by half a percentage point.
Kwarteng said the government will reveal plans for reducing the U.K.’s debt in the coming months.