Local politicians have blasted the government for being ‘out of touch’ and ‘economically illiterate’ as the pound’s value fell to a record low yesterday. 

Sparked by the new chancellor Kwasi Kwarteng’s tax-cutting mini-budget announced last week, the pound plummeted to 1.0327 against the US dollar. 

Liberal Democrat parliamentary candidate for Wokingham, Clive Jones, called the announcement “a recipe for disaster” that will leave people “suffering” from soaring prices.

“With the worst inflation in decades, rising interest rates, and an economy heading into a recession, the Conservative claim to be the party of business now seems like a sick joke,” Cllr Jones added. 

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The drop came after Mr Kwarteng announced plans to stimulate growth by cutting income tax and stamp duty, whilst increasing borrowing, at a time of double-digit inflation and refusing to provide an economic forecast from the Office for Budget Responsibility (OBR). 

Wokingham MP John Redwood, a supporter of the new Prime Minister Liz Truss during the recent leadership debate, tweeted that “synthetic anger” about the lack of an OBR forecast “silly” as they are “wildly inaccurate”. 

Wokingham Labour Campaign Coordinator, Councillor Andy Croy, accused the Conservatives of launching a “Special Financial Operation” on the British economy that would have “devastating consequences” for local people. 

“The Conservatives have cut taxes for the very richest and are borrowing money to pay for it.  We will all have to pay back the loans needed to pay for these tax cuts. Not only is it terribly unfair it is also economically illiterate,” he added. 

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Sterling rebounded to around 1.08 dollars by 7am this morning, but economists have warned it could still fall to parity with the dollar this year for the first time, with many predicting the Bank of England (BoE) will need to raise interest rates to stem the flow. 

In his blog, Mr Redwood warned the BoE to “be careful” while the government is “providing considerable assistance” through energy support measures and lowering taxes. 

Cllr Croy called the government “economically illiterate” and have “lost control” after some mortgage lenders withdrew deals in response to the market turmoil. 

He accused the Conservatives of allowing energy prices to double while the companies sit on “mountains of cash” instead of implementing a windfall tax. 

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The Liberal Democrats are also calling for a further windfall tax on oil and gas companies, as well as an immediate freeze in domestic energy prices and a scrapping of the lift on banker’s bonuses. 

Mr Redwood stated that while he would “like borrowing to fall” and the budget to be balanced but there are “no options to let that happen easily”. 

The Wokingham MP suggested the government could make savings by seeing “more people off benefit into work” and “getting a better grip on the numbers of illegal and low paid economic migrants”. 

Mr Redwood did not respond when approached for comment on whether leaving the world’s largest economy was ideal if the government needs more growth, if cutting taxes and increasing borrowing at a time when inflation is already high is a good idea or if the Conservatives should go back to the electorate to seek a mandate for such a drastic change in economic policy.