British pound falls to new low against the dollar after taxes slashed

The British pound hit an all-time low against the U.S. dollar on Monday, reflecting a highly negative review of the new government’s plan for big tax cuts and borrowing and adding to the anxiety of consumers already preparing for soaring energy bills this winter.

The sharp drop in the value of the pound comes as the British government grapples with soaring public debt and a cost-of-living crisis, amid deteriorating investor confidence. It also raised the prospect that Britain’s central bank may intervene in currency markets to shore up the pound.

Sterling’s slump in part reflects the strength of the U.S. dollar, which has been boosted by higher interest rates. But the pound has also dropped against the euro, indicating specific concerns about the British economy.

The pound crashed to a record low of $1.0327 in Asian trading early Monday, before regaining some ground and stabilizing around $1.07 — still well down from where it was on Friday morning before the government unveiled its “mini-budget.”