Eurocrats celebrate 'delusional' UK's economic chaos and blame Brexit for pound slump

Ms Truss said big tax cuts were the right path for Britain and refused to consider reversing the so-called “mini-budget” laid out last week. The pound was last down 0.88 percent to $1.0791 after hitting a session low of $1.0764. The euro was up 0.18 percent against sterling at 89.54 pence.

Sterling crashed to a record low against the dollar of $1.0327 on Monday after Chancellor Kwasi Kwarteng unveiled plans to slash taxes, particularly for the rich, and jack up borrowing.

The mini-budget also wreaked havoc in the UK government bond market, forcing the Bank of England (BoE) to intervene on Wednesday.

The BoE said it would buy around £65billion of long-dated government bonds after seeing “dysfunction” in the market.

Sterling bounced on Wednesday to close at $1.0877 as investors digested the BoE’s plans.

However, it resumed its long-running slide on Thursday as the Prime Minister came out to defend her government’s policies.

German Finance Christian Lindner took the opportunity to defend the importance of fiscal restraint with the example of the UK.

He said: “In the UK, a major experiment is starting as the state simultaneously puts its foot on the gas while the central bank steps on the brakes.

“We must not counteract the central bank’s policy of rising interest rates by sending fiscal stimulus for demand or for growth.”

Nadia Calviño, Spain’s deputy prime finance minister used the UK crisis to speak against tax-cutting regions run by Spain’s conservative opposition party.

She said: “We’re all capable of seeing how it’s leading the country not adrift but into disaster.”

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