The pound has plunged back into the red after two major interventions last night reignited investor concerns over the UK’s tax cut budget. In an extraordinary development, the IMF has urged Prime Minister Liz Truss to reverse her economic policies – pointing in particular to the decision to scrap the top rate of income tax. Ratings agency Moody’s also warned that the policies risked “permanently weakening the UK’s debt affordability”, in the strongest indication yet that the country is facing a credit downgrade. The pound, which crashed to a record low against the dollar earlier this week, fell back below $1.07.

5 things to start your day

  1. IMF urges Truss to reverse top tax rate cut in rare intervention Highly unusual move by global lender of last resort condemned by senior Tories as it ramps up pressure on PM and Chancellor
  2. Building Societies Under Pressure as Borrowing Costs Soar Smaller lenders are more exposed to swings in wholesale rates than the bigger banks that lend to their deposits.
  3. Bank signals ‘significant’ response to turmoil BoE chief economist Huw Pill was speaking as long-term borrowing costs hit their highest level since 2002
  4. Fears of job cuts as MailOnline and Daily Mail to merge functions It comes as the publisher tries to forge a digital future for titles that often overlap and compete.
  5. Christmas shopping chaos prevails as Royal Mail staff plan 19-day walkout Union leaders have launched a major escalation in their industrial dispute with Royal Mail, warning of serious disruption to deliveries

What happened in the night

Sterling fell again this morning, down almost 1% against the dollar at $1.0634. Asia continued its downward trend, with Tokyo, Hong Kong and Seoul down more than 2%, while Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta were also down.

It’s coming today

Economics: BRC Retail Price Index (UK), Crude Oil Inventories (US), Pending Home Sales (US), Gross Domestic Product (US) Corporate: Boohoo, Everyman Media (Intermediate)