Pound sinks to record low against the dollar as chancellor and prime minister defend mini-budget

The pound has fallen to a record low against the dollar amid a fresh investor rush towards the US currency globally

Sterling slipped by nearly 5% early on Monday to $1.0327 - building on fresh 1985 lows seen on Friday after UK chancellor Kwasi Kwarteng unveiled the biggest program of tax cuts for 50 years

The £45bn tax-slashing package saw the market deliver a verdict on whether the public finances would be sustainable

The pound plunged below its all-time low against the greenback - set in February 1985 - of $1.054 early on Monday in Asian trading, fuelling fears at that time that parity was even possible

It later stabilized around $1.05405 - still 3% below the previous session's close

Joseph Capurso, head of international economics at Commonwealth Bank of Australia. wrote: "The poor situation in the UK exacerbates support for the USD, which can track higher again this week

If a sense of crisis about the world economy were to emerge, the USD could jump significantly,

Trouble for both the UK and Europe more generally is that weak currencies raise dollar-denominated import costs, potentially fuelling inflation further

The UK also faces goods from the continent becoming more expensive because its value has also slipped sharply versus the euro

In an interview with CNN on Sunday, Ms. Truss rejected comparisons with US President Joe Biden's approach after he said he was "sick and tired of trickle-down economics"

She said: "We all need to decide what the tax rates are in our own country, but my view is we absolutely need to be incentivizing growth at what is a very, very difficult time for the global economy.

Asked whether she was "recklessly running up the deficit," Ms. Truss said: "I don't really accept the premise of the question at all."

Mr. Kwarteng suggested his announcements were just the beginning of the government's agenda to revive the UK's stagnant economy.

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We've only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it's

the British people that are going to drive this economy," he told the BBC's Sunday With Laura Kuenssberg program.