The British pound just plunged to an all-time low against the US dollar

The pound plunged to an all-time low of 1.035 against the US dollar on Monday as traders bet that looming tax cuts could fuel inflation, prompt faster interest-rate hikes, and undermine Britain's already-shaky economy.

Chancellor Kwasi Kwarteng said Friday that he intends to scrap Britain's top income-tax rate of 45%, nix a scheduled rise in the national insurance rate, and abolish the stamp duty on property purchases of under £250,000. On Sunday, Kwarteng hinted there could be even more tax cuts coming.

His tax cut plan is aimed at boosting the ailing UK economy and reducing the risk of a severe recession. However, it's sparked fears of faster price increases, government debt that's out of control, and a worse downturn.