The UK pound fell amid fears of a recession. – Pakistanwap

The pound hit a record low against the dollar on Monday on growing concerns about the UK economy after the government unveiled a massive budget of tax cuts.

The sell-off came as equity markets across Asia and Europe fell again on growing expectations that the central bank’s interest rate hikes would trigger a deep and painful recession to fight inflation. Oil also suffered from oversold.

Authorities in several countries, including the US, UK, Switzerland and Sweden, announced further increases in borrowing costs.

The move sent equity markets back into the red as authorities reiterated their focus on fighting inflation, even if that meant triggering a recession.

But the week’s biggest loser was the pound, which fell below $1.10 for the first time since 1985 as new finance minister Kwasi Kwarteng announced his controversial mini-budget.

It then extended losses to briefly touch an all-time low of $1.0350 in Asian trade on Monday after it said it planned to unveil further cuts, despite its London markets were disrupted by the budget.

It also fell to a two-year low against the euro, although the single currency is under pressure against the dollar, sitting at 2002 levels.

Now observers are warning that the pound could fall further.

“The pound’s crash shows that markets lack confidence in the UK and its financial strength is under siege,” said Jessica Amir of Saxo Capital Markets.

“The pound is a whisper away from parity and it’s only going to get worse from here.”

Kwarteng, who was appointed by Liz Truss after she became prime minister earlier this month, said he wanted to boost the British economy and provide cash to families to cushion from rising energy costs. Reduction is planned.

But investors have been spooked by the huge amount of debt likely to be required for the multibillion-pound package, which critics say will benefit the rich more than the poor during a cost-of-living crisis.

Sterling’s fall has fueled speculation that the Bank of England may have to raise emergency interest rates to give the currency a much-needed shot in the arm.