Pound hit again as IMF slams UK tax plans

STORY: The pound took another hit on Wednesday (September 28).

That after a wave of international criticism over UK plans to slash taxes and ramp up borrowing.

The International Monetary Fund warned that “large and untargeted fiscal packages” would be likely to heighten inequality.

It said inflation pressures meant they were unwise, and warned that fiscal policy shouldn’t work against monetary policy.

Analysts called the rare intervention by the global lender “scathing”, and a “rebuke”.

Ratings agency Moody’s piled in later.

It said the unfunded tax cuts were “credit negative” for the country.

The comments sent sterling tumbling again.

In early London trade the pound was down around half a percent versus the dollar, not far above the record low of almost 1.03 hit on Monday (September 26).

Some analysts have predicted it could soon go below parity for the first time.

The selloff is also slamming UK government bonds.

On Wednesday the yield on long-term debt pushed above 5% to hit multi-year highs.

Such moves will raise the cost of borrowing the sums set out in the latest spending plans.