The pound suffered further falls on Wednesday after the UK Government was heavily criticised by the International Monetary Fund over its handling of economic policy.
Sterling fell back to 1.06 US dollars after reaching 1.08 US dollars on Tuesday.
The pound plunged to its all-time low against the dollar on Monday – at 1.03 – and there are fears it could head towards parity with the greenback unless the UK Government can ease financial market fears over its plans to slash taxes.
In a statement, an IMF spokesperson said: "We are closely monitoring recent economic developments in the UK and are engaged with authorities.We understand the sizable fiscal package announced aims at helping families and businesses deal with the energy shock and at boosting growth via tax cuts and supply measures.
“However, given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy.
“Furthermore, the nature of the UK measures will likely increase inequality. The November 23 budget will present an early opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high-income earners.”
In response to criticism from the International Monetary Fund, a Treasury spokeswoman said: “We have acted at speed to protect households and businesses through this winter and the next, following the unprecedented energy price rise caused by (Vladimir) Putin’s illegal actions in Ukraine.
“Our Energy Price Guarantee saves households £1,000 on average and we’re halving business energy bills through the Energy Bill Relief Scheme.
“We are focused on growing the economy to raise living standards for everyone and the Chancellor has announced he will publish his medium-term fiscal plan on November 23 which will set out further details on the Government’s fiscal rules, including ensuring that debt falls as a share of GDP (gross domestic product) in the medium term.”
It's a remarkable rebuke and further egg on the face for the UK government off the back of their heavily scrutinised mini-budget that was announced by Kwasi Kwarteng on Friday.
Yet in a bizarre twist, people, mostly Brexiteers and Tories are lashing out at the IMF's comments oddly branding them 'left-wing.' There have also been columns written claiming that the markets are scared of Labour's Keir Starmer.
\u201cThe IMF is the epitome of right wing capitalism . The 1st thing it does when asked for help is to say\n"privatise everything"\nThe are too left wing for Lillco as he is on the right wing of the right wing.\u201d
\u201cTrading floors? Left wing\nThe markets? Left wing\nThe IMF? Left wing \n\nSurely this is just declaring current Conservative policy and orthodoxy as to the right of *everything*, making it\u2026 an extreme?\u201d
\u201cSo the IMF and international investment banks are "left-wing bodies" full of Remainers acting out of spite towards the UK according to these goons this morning \ud83d\udc47\ud83d\udc47\nBatshit-crazy barmy bananas gaga doolally off their trolley wacko delusional doesn't even BEGIN to cover it\ud83e\udd21\ud83e\udd21\u201d
\u201cI\u2019ve figured out why Kwarteng\u2019s mini-budget crashed the pound and created financial panic. It isn\u2019t just that the City bankers, international investors and IMF are lefties. Reality is a left-wing plot conspiring against the Tories. It\u2019s clearly the only explanation.\u201d