Sterling slides ahead of expected British tax cut details

The very strong dollar has weighed on all major currencies in recent months, although the pound has been very hard hit as Britain grapples with a sluggish economy and sky high inflation. Chancellor Kwasi Kwarteng hopes his policies will boost growth and break a "cycle of stagnation", though some fear the scale of the spending could put sterling under further pressure.

Sterling fell to a fresh 37-year low against the dollar on Friday ahead of expected details from Britain's new finance minister of close to 200 billion pounds ($225 billion) of tax cuts and energy subsidies.

The pound fell around 0.6% to as low as $1.1170, its lowest level since 1985. It was steady against the euro at 87.40 pence per euro. The very strong dollar has weighed on all major currencies in recent months, although the pound has been very hard hit as Britain grapples with a sluggish economy and sky high inflation.

Chancellor Kwasi Kwarteng hopes his policies will boost growth and break a "cycle of stagnation", though some fear the scale of the spending could put sterling under further pressure. He is due to make a statement to parliament at 0830 GMT.

Derek Halpenny, head of research at MUFG, said in a note he sees risks the pound could fall further over policies that could possibly: "lack credibility and raise concerns over external financing pressures given the budget and current account deficit combined looks to be heading to around 15% of GDP." Of the international banks and research consultancies polled by Reuters last week, 55% said there was a high risk confidence in British assets would deteriorate sharply in the coming three months.

Meanwhile, Bank of England policymaker Jonathan Haskel said on Thursday that the central bank was in a difficult position as the government's expansionary fiscal policy appeared to place it at odds with the BoE's efforts to cool inflation.

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