Treasury minister tweets ‘great to see Sterling strengthening’ moments before colossal slump

Chris Philp, Chief Secretary to the Treasury, celebrated the rise in the pound - just before it dropped to a 37-year low.

Ahead of Kwasi Kwarteng’s radical tax-cutting mini budget, Mr Philp tweeted: “Great to see sterling strengthening on the back of the new UK Growth Plan.”

At 10am when the minister tweeted, the exchange rate to the dollar rose to 1.1194 but as the Chancellor unveiled a raft of new pledges, the pound dropped to a low of 1.1039 - not seen since 1985.

As of 2.19pm, the pound stabilised somewhat at 1.1081 but has slumped by almost 18 per cent for the year.

The stark slump in the pound came after the Chancellor scrapped the 45 per cent income tax rate and reversed the national insurance rise.

Mr Kwarteng also brought forward the one percent cut to the basic rate to 19 per cent by a year.

The Chancellor reversed the rise in corporation tax from 19 per cent to 25 and the cap on banker bonuses in order to stimulate growth in the economy.

Unveiling the biggest tax cuts since 1972, he told the Commons: “We are at the beginning of a new era.

“For too long in this country, we have indulged in a fight over redistribution.

“Now, we need to focus on growth, not just how we tax and spend. Our duty is to make the UK one of the most competitive economies in the world.”

Treasury estimates priced the tax cuts, including the promised reversal of the national insurance rise and axing the hike to corporation tax, at nearly £45 billion a year by 2026.

The package was announced a day after the Bank of England warned the UK may already be in a recession and lifted interest rates to 2.25 per cent.