The Bank of England said it is keeping a close eye on financial market developments after the British pound fell to an all-time low against the US dollar.
The pound fell as much as 4.8% to trade below $1.04 in the early hours of Monday morning, extending losses from last week when Finance Minister Kwarteng outlined the U.K. government's mini-budget.
The U.K. currency fell against the dollar after the Bank of England issued a statement.
The pound was last seen at $1.0713.
Bank of England Governor Andrew Bailey said in a statement that the Bank is closely watching developments in financial markets.
Bailey said that the role of monetary policy is to make sure that demand doesn't get ahead of supply in a way that leads to more inflation.
The central bank's monetary policy committee will make a full assessment at its next meeting in November, according to the governor of the Bank of England.
The Monetary Policy Committee will not hesitate to change interest rates in order to return inflation to 2% in the medium term.
Tax cuts not seen in Britain since 1972 and an unabashed return to the "trickle-down economics" promoted by the likes of Ronald Reagan and Margaret Thatcher were some of the highlights of the announcement.
At a time of sky-high inflation and a worsening cost-of- living crisis, the U.K. is at odds with most major global economies.
The medium-term fiscal plan for the U.K. will be set out in November, according to the U.K. Treasury.
The Office for Budget Responsibility set out a full forecast after Kwarteng requested it.
Friday's mini-budget did not include economic forecasts from the OBR.
Ensuring that debt falls as a share of GDP in the medium-term will be included in the Fiscal Plan.
Supply-side growth reforms will be laid out next month.
The report was contributed to by CNBC.
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