Sterling news - live: Sterling falls again after 'very serious' warning from IMF in Kwarteng

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Bank of England 'won't hesitate' to raise interest rates amid market turmoil

The International Monetary Fund's warning about tax cuts for the wealthy by Liz Truss and Kwasi Kwarteng is "very serious' and shows 'what a mess the government has made of the economy', Labour's Sir Keir Starmer said as the pound fell has in Asian trade.

In a rare intervention, the IMF took aim at the government, warning that "large and untargeted tax packages" would "likely increase inequality" in Britain, after that Friday's Chancellor's Mini-Budget caused sterling and bonds to fall to historic lows and gilt yields soar, reflecting the cost of borrowing.

"Given high inflationary pressures in many countries, including the UK, we do not recommend large, untargeted fiscal programs at this stage, as it is important that fiscal policy does not not work against the grain of monetary policy,” an IMF spokesperson said.

The pound then fell below $1.064 on Wednesday morning – still well above the all-time high from $1.03 at the start of the week - before climbing back to the relatively flat $1.08 seen most days on Tuesday.

1664355443White House urges 'fiscal caution' after UK unrest

White House economic adviser Brian Deese said he was not surprised by the financial markets' negative reaction to the UK's tax cuts and borrowing plans.

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Top adviser Joe Biden, director of the White House National Economic Council, has clarified that he underlined the need to maintain "budgetary prudence, budgetary discipline".

Mr. Deese said: "In a cycle of monetary tightening like this, the challenge with this policy is that it just puts the monetary authority in a potentially even tighter position. I think that's what you've seen in reaction."