British Pound Plummets To Record Low Against U.S. Dollar After U.K. Gov’t Signals More Tax Cuts

The British pound slumped to an all-time low against the U.S. dollar early Monday morning as markets reacted negatively to the new government's signals that it will pursue more aggressive tax cuts.

As Asian markets opened on Monday morning, the pound dropped to its lowest level since 1971.

At 8 am BST, the currency was trading just above $1.067, according to XE.

The British currency dropped below 1.08 before recovering to 1.10.

There is a 26% chance that the pound will hit parity with the US dollar in the next six months.

The Dollar Index, which measures the strength of the U.S. dollar against other major currencies, has risen in the last 30 days.

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There is more tax cuts in the U.K., according to the Chancellor of the Treasury.

to come…I want to see over the next year, people retain more of their income because I believe it's the British people that are going to drive this economy.” Kwarteng also pushed back against critics who point out his tax cuts disproportionately favor the rich saying, “they favor people right across the income scale.