The Bank of England may need to raise interest rates on an emergency basis as the mini-budget pushes the pound to a record low against the dollar, according to members of the Conservative Party.
Citing unnamed sources, the report said that lawmakers in the ruling party believe that the central bank will make such a move.
The pound fell to its lowest level since 1971 when the UK switched to a decimal-based currency system. The pound has recovered some of its lost value.
The pound fell on Friday after the government introduced its "Growth Plan" aimed at a 2.5% trend of economic expansion, a mini-budget that includes proposals for tax cuts. The plan has spooked investors because they fear it will cause inflation to go up even more.
The central bank was going to meet on November 3. Since December, policy makers have raised rates seven times. Last week, the benchmark rate was increased by 50 basis points.
The growth plan was introduced by the finance minister under the new government.
One former minister, who asked not to be named discussing internal party discussions, said that when you start getting an emergency, it's bad politics.
The mini-budget does not have the support of their parliamentary colleagues, according to another lawmaker. According to the report, the idea of voting down the plans isn't mainstream among Conservative members of parliament.
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