The pound has slumped to a new 37-year low against the US dollar after Kwasi Kwarteng delivered his Mini-Budget this morning.
Shortly after the Chancellor's announcement, Sterling traded below $1.11 - a figure that has surpassed pandemic and Brexit lows.
This means Brits heading to the USA are facing the lowest exchange rates on offer since the 80s, with the pound having fallen 19% against the dollar since the start of the year.
Mr Kwarteng opened by outlining plans to support homes and non-domestic properties with the surging cost of energy, insisting "help is coming" for people with soaring bills.
The Chancellor also pledged to “turn the vicious cycle of stagnation into a virtuous cycle of growth.”
During his speech, he admitted: "High energy costs are not the only challenge confronting this country.
"Growth isn't as high as it should be. This has made it harder to pay for public services, requiring taxes to rise."
His comments were met with jeers from Labour MPs.
The promise for growth comes as the pound sterling plummeted by 0.89 per cent to 1.115 US dollars, meaning it has declined 17% against the US currency this year so far.
And this is shortly after the Bank of England warned the UK could already be in a recession, as it launched another 0.5 percentage point interest rate hike to 2.25% on Thursday.
The central bank previously projected economic growth this current financial quarter, but said it now believes Gross Domestic Product (GDP) will fall by 0.1%.
This means the UK economy would have seen two consecutive quarters of decline – technically defining a recession.
Economists have warned that the Chancellor’s tax-cutting ambitions could risk putting further strain on the pound.
Following the Chancellor's announcement, the FTSE 100 has also dropped to its lowest level in two months.
During the announcement, one tory minister claimed that energy bill support will help Brits tackle soaring inflation.
Levelling-Up Secretary Simon Clarke said: "Inflation is something we're determined to tackle.
"We are making sure the huge increases in family energy bills and business energy bills which were anticipated as a result of what Putin's doing won't happen.
"The anticipated increases in inflation are being mitigated very substantially by the action we're taking on energy policy."
As part of the new mini budget, Mr Kwarteng also announced a lifting of the cap on banker's bonuses, as well as cuts to Stamp Duty and income tax.
The planned increase in corporation tax has now been cancelled, and legislation is due to be introduced that will require unions to put pay offers to a member vote.
This proposed “growth plan” involving around 30 measures, comes at a time when the UK faces a cost-of-living crisis, recession, soaring inflation and hiking interest rates.
Mr Kwarteng announced yesterday that National Insurance will drop from 13.25% back down to 12% - the level it was at before the Tory hike in April.
Travel money experts are warning holidaymakers to plan ahead in order to protect their cash, with today’s rates amounting to £242 less for every £1,000 exchanged compared to January of this year.
Jack Mitchell, Head of Travel Money at FairFX, said: “The pound/dollar exchange rate will be concerning for anyone planning upcoming trips to the US, as holidaymakers face rates we’ve not seen since the 1980s.
“Amid rising costs, inflation and ongoing economic uncertainty, rates may well remain at this level, and it will be a worrying time for anyone hoping to plan trips abroad. But there are steps you can take to avoid seeing your holiday budget cut further.
“Keeping a close eye on currency rates and patterns is always the first step, and if rates are looking more favourable, it could be worth considering locking them in on a prepaid currency card.
"Even a small change can make a difference, for example, this week’s fall of 23 since Monday amounts to £33 less for every £1,000 exchanged alone.
“Using a specific currency card also allows you to avoid hidden ATM and transaction fees which are common with typical bank credit and debit cards. It’s also important to always pay in the local currency at your destination, as this allows you to avoid falling foul of Dynamic Currency Conversion."
Money expert Martin Lewis took to Twitter, saying he is "really worried" following the Chancellor's announcement.
He tweeted: "That really was quite a staggering statement from a Conservative party government
"Huge new borrowing at the same time as cutting taxes.
"It's all aimed at growing the economy. I really hope it works. I really worry what happens if it doesn't."
