Influenced by the British government's massive tax reduction plan, which hit the market confidence, the exchange rate of sterling against the US dollar fell to around 1 to 1.03 in the Asian morning trading on the 26th, hitting the lowest level since the British currency was decimal in 1971, and then rebounded to around 1 to 1.08. On the 23rd, the British Chancellor of the Exchequer, Kwasi Kwarten, announced the country's largest tax cut in 50 years to boost the economy. On the same day, the exchange rate of sterling against the US dollar fell below 1 to 1.09, the lowest level in 37 years. On the 25th, Kwarten said that the government had planned to reduce the basic tax rate of personal income tax, and more relevant measures would be introduced in the future. This statement aggravated the market panic and led to the continued decline of the sterling exchange rate on the 26th. Paul Johnson, director of the British Institute of Fiscal Studies, believes that the tax reduction plan will significantly boost government debt, and at the same time will boost demand, thus stimulating inflation to continue to rise, which runs counter to the goal of the Bank of England, the British central bank, to continue to raise interest rates to reduce inflation. Richard Hunt, market director of Interactive Investment Company in the UK, said that investors were worried that tax cuts would put further pressure on the UK economy. The tax reduction plan and the strengthening of the US dollar pushed the exchange rate of sterling against the US dollar briefly to a historical low on the 26th. From April to July this year, the inflation level in the UK hit the highest level in 40 years. In August, the UK consumer price index rose 9.9% year on year, still at a 40 year high. To curb high inflation, the Bank of England announced on September 22 that it would raise the benchmark interest rate from 1.75% to 2.25%, which is the seventh time the Bank of England has raised interest rates since December last year. (Liu Xinshe)