Pound hits 50-year low against dollar as UK mulls further tax cuts

The British pound reached an all-time low against the US dollar on Monday.

The development is coming less than a week since the pound plummeted to $1.13 — its lowest level since 1985 — before regaining ground.

The pound dropped 3.6 percent on Friday when Kwasi Kwarteng, UK’s finance minister, unveiled historic tax cuts funded by the biggest increase in borrowing since 1972.

On Monday, the currency slumped further as much as 4.9 percent to $1.0327 before stabilising around $1.05425.

Kwarteng had revealed that there would be more tax cuts, adding that the cuts were “just the start”.

The finance minister added that the idea was to put “more money into people’s pockets” as he defended the £45 billion worth of tax-cutting measures announced last week.

Speaking on Sunday With Laura Kuenssberg programme on BBC, Kwarteng said there is also reverse on increased national insurance, adding that the aim is to ensure the people have more income.

“That’s why we’ve reversed the national insurance increase — which I think was not a good policy and we’ve reversed that — and also we are bringing forward the cut in the basic rate, and there’s more to come,” he said.

“We have only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it’s the British people that are going to drive this economy.

“That’s why I want people to retain more of the income they earn.

“We are not stopping there. We’re just getting started.”