Pound falls below $1.09 and borrowing costs rise as UK markets get spooked | Business

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The pound fell to a fresh 37-year low against the dollar and UK borrowing costs rose to their highest in more than a decade as the government’s radical tax cut agenda and lending bonanza risked eroding confidence in financial markets.

Investors were spooked by the prospect of unfunded tax cuts announced in the Chancellor’s fiscal statement drove the pound to close to its weakest point since pre-1985. Sterling fell 3.2 percent against the dollar to as low as $1.0895 after Chancellor Kwasi Kwarteng set out 140 billion pounds worth of tax cuts to boost growth. The pound fell to as low as $1.05 in 1985 when the US was forced into an international currency devaluation pact.

The interest rate on benchmark UK 10-year bonds,

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