British minister Kwasi Kwarteng unveiled a historic level of tax cuts and large increases in borrowing on Friday. The agenda released by Kwarteng floored financial markets and ultimately led to a sharp decrease in sterling and British government bonds. Some of the moves made by Kwarteng included a removal of the top rate of income tax, the cancellation of a planned rise in corporate taxes, and revealing how much the spending plans of new Prime Minister Liz Truss would cost. Truss has already said that she aims to double Britain’s rate of economic growth while she is in office. In response, investors dropped British government bonds in rapid order as the cost of borrowing over the next five years saw its largest one-day rise in over three decades.

The British pound dropped 3% against the dollar which has not been observed in almost four decades. Truss’s government is losing financial credibility, according to economists and investors after announcing these tax cuts and massive government spending plans. Many large financial institutions have stated that something has got to give to help calm down markets and restore credibility. The timing is also suspect, they say, after the Bank of England raised interest rates in an attempt to curb inflation, which could spell bad news for the administration as public optimism may wane sharply in response.