Pound comes under new pressure after Bank of England fails to raise rates

Within minutes of the Bank saying that it intended to wait until November before responding to the recent turbulence, the pound had dropped two cents against the dollar and was within three cents of the record low of $1.03 hit in Far East trading overnight.

In a sign that international policymakers are growing increasingly alarmed by the recent turmoil, Raphael Bostic, the president of the Atlanta Federal Reserve, warned the sell-off in the pound reflected rising uncertainty about the direction of the UK economy.

The chancellor said the Treasury would not be announcing fresh plans for departmental spending even though rising inflation means money allocated across Whitehall a year ago now buys less.

Conservative MPs were furious with Kwarteng and the prime minister, Liz Truss, with some mulling a further leadership challenge or the option of voting down the forthcoming finance bill.

Markets have become increasingly concerned about the prospects for the UK economy since the government announced plans on Friday to cut taxes by the largest amount in 50 years.