More from shadow chancellor Rachel Reeves now, who in the last few minutes has set out Labour's "green prosperity plan" during her keynote speech at the party's conference.

She said Labour's plan is to:

• provide "the only sustainable solution to the energy crisis"
• to "free ourselves from dependence on Russia"
• and "to invest in solar, in wind, in tidal, in hydrogen and nuclear power"

Reeves said the ultimate aim is "to pass on to our children a fairer, a greener country", describing this as both a "moral responsibility" and "economic necessity".

"On climate change, the costs of in action today will mean far greater costs tomorrow," she said, adding: "I refuse to leave our children to pick up the pieces of our failure."

And to huge applause, she told delegates: "I will be a responsible chancellor. I will be the first green chancellor."

Nick Eardley
Chief political correspondent, at Labour conference

Rachel Reeves is trying and sketch out a different vision for the economy to the government.

Labour is optimistic it can win the battle of ideas; by saying the strategy should be fairer and tax cuts for those on high salaries are a bad idea.

There is some agreement; that cutting tax for working people is a good idea. Labour has suggested it's open to borrowing to cut the basic rate of income tax.

But the biggest division is over how much borrowing is sensible. Labour think the government is borrowing far too much - and that is fanning the flames when it comes to the fall in the pound.

Rachel Reeves, Labour's Shadow Chancellor opens her key note speech at the Labour Party's Annual Conference in Liverpool by accusing Chancellor Kwasi Kwarteng of missing an opportunity to set out a "serious response to the cost of living crisis".

"What did we get instead?" she asks. "Tax cuts for the top 1%, increased bankers bonuses, and more than £50bn piled onto the national debt every single year.

"Sterling is down, that means higher prices as the cost of imports rise," she says.

She adds that with the cost of government borrowing up, tax payers' money will go into paying off debt.

"The cost of borrowing for working people will now go up too," with higher mortgage repayments for families, she says.

"And all for what? Not to invest in industries of the future, not for our NHS, not for schools, but for tax cuts for the wealthiest, a return to trickle-down economics."

Ben King
Business reporter

The falling pound is likely to lead to the Bank of England raising interest rates sooner and steeper.

Markets expect a big increase at the next rate-setting meeting on 3 November, with rates expected to peak above 6% in November 2023, according to newswire Bloomberg.

Here's why:

• The Bank is meant to keep inflation at 2%, and when it's higher than that the Bank can raise interest rates to push it downwards
• The mini-budget has been followed by a sharp fall in the pound - and a falling pound pushes inflation up, because it makes imports more expensive
• If the pound stays low, the Bank may have to raise interest rates to counteract this upward pressure on inflation
• Increasing interest rates helps to push the pound up against other currencies, at it gives investors a greater reward for owning UK investments
• Kwasi Kwarteng's dramatic package of tax cuts may also increase inflation, by giving people more money to spend at a time when prices are already rising
• This may give the Bank another reason to push interest rates up further

Dharshini David
Economics Correspondent

It won't take long for the frenzy on trading floors to spill over to shopping bills.

One in every six pounds of our imports comes from the US - everything from clothes to gadgets. It’s our biggest trading partner.

The bill for those goods and services (totalling £90bn ($96m) last year) potentially rose by 5% due to currency movements over the last 10 days alone.

But the bump to prices goes further and wider. Oil and some other commodities are priced in dollars. The fall in sterling, says the AA, has added £6 to the cost of an average tank of petrol alone, wiping out the benefit of the duty cut funded by the government earlier this year.

This at a time when the cost of living is already about 10% higher than a year ago, household budgets already intensely squeezed.

With the drop in the pound, the cost of UK government borrowing surged again to the highest level since 2008 during the financial crisis.

It's because Chancellor Kwasi Kwarteng's mini-budget outlined tax cuts which means the billions needed to help households with their energy bills will have to be borrowed.

When governments want to borrow money, they sell bonds - usually bought by international investors - and the loan gets added on to the national debt.

The larger the national debt gets, the more interest the government has to pay on all the bonds it has sold.

Until recently, the government was able to borrow very cheaply, at rates of less than one per cent.

But interest rates have been going up, and so has the government's interest bill.

The interest on ten-year bonds has risen from 3.83% on Friday to 4.11% on Monday.

Paul Dales, from Capital Economics, says this shows that markets are worried that the government's tax cuts will force the Bank of England to raise interest rates higher and "a deterioration in the public finances will undermine the UK's long-term growth prospects".

Some economists have speculated that the Bank of England may call an emergency meeting to raise interest rates this week to hike interest rates again ahead.

Last week, the Bank raised interest rates by half a percentage point to 2.25% to try to calm inflation which is at a 40-year high of 9.9%. The rate increase was the seventh in a row and took rates to the highest for 14 years.

Commenting on the likelihood the Bank of England could raise rates before its scheduled meeting in November, former Bank deputy governor Sir John Gieve told the BBC: "I'm sure they very much don't want to do that... because that is a sign of pressure.

"A regular series of meetings at predictable times is part of the regime that we put in place when we made the Bank independent, so emergency meetings are avoided if at all possible and I am sure they will try to avoid it."

Just 24 hours ago, UK Chancellor Kwasi Kwarteng refused to comment on market movements when asked about the fall in the pound since the announcement of his mini-budget.

"We've got to have a much more front-footed approach to growth and that's what my Friday statement was all about," he told the BBC.

"I think that if we can get some of the reforms... if we get business back on its feet, we can get this country moving and we can grow our economy, and that's what my focus is 100% about."

Image source, PA Media

Easyjet will be impacted by the fall in value of the pound, its chief executive Johan Lundgren says, due to the airline having "a lot of expenses in dollars and we have revenues coming in in pounds".

Speaking at its headquarters at Luton Airport, he said: "Clearly, the dollar is very strong versus the pound. It has an effect.

"But, on the other hand, we’re one of the best hedged airlines when it comes to the fuel position and the effects of this going forward.

"Of course, it does have an impact but it has less impact on us versus some of our competitors."

Image source, Getty Images

The fall of the pound could cause the price of a pint to go up, Carlsberg's boss has suggested.

Paul Davies earlier told BBC Radio 4's Today programme the drop was "worrying" for the British beer industry.

The chief executive officer at Carlsberg Marston's Brewing Company says that many of the hops used in the UK are imported and a lot of them, particularly for craft brewers, are imported from the US – so this change is "worrying for industry".

"Then of course people drink a lot of imported beers from Europe, and the euro vs the pound is also something we're watching very closely at the moment," he says.

"I would say as an industry we're generally using British barley and we're using a lot of British hops, but of course if you're drinking double IPA that requires a lot of Citra hop and other hops from the States, and at some point that is going to have to be passed through to both the customer and the consumer if prices are this volatile."

Image source, Reuters

Chancellor Kwasi Kwarteng announced the biggest package of tax cuts in 50 years on Friday.

He said high tax rates "damage Britain's competitiveness", reducing the incentive to work and for business to invest, and added that cutting taxes was the answer.

Despite a fall in sterling following his announcement, on Sunday Kwarteng said more tax cuts were to come.

The government insists its "ambitious" growth plan will boost the economy.

The pound was already sliding against the dollar in the weeks leading up to the mini-budget, partly down to the wider strength of the US dollar.

It was trading at $1.135 earlier in September - the first time it had fallen below the $1.14 mark in nearly four decades.

When Chancellor Kwasi Kwarteng announced the UK's mini-budget on Friday the pound dropped to a 37-year low.

Sterling fell more than 3% against the dollar, dropping below $1.09, as investors questioned the huge tax cuts in Kwarteng's plan.

Markets closed for the weekend and when they re-opened, first in Asia, sterling fell further - close to $1.03.

The pound has now regained some ground to stand at about $1.07 by the time the markets opened in the UK on Monday morning.

Leading economist Mohamed El-Erian has told the BBC that the Bank of England should raise interest rates again to halt the slide in the pound.

"If I were the governor and the chancellor is not modifying his plan, I would increase interest rates," said Mr El-Erian, who is an advisor to investment giant Allianz.

"I would increase interest rates and not by a little... by one full percentage point to try and stabilise the situation," he added.

Image source, PA Media

The pound's value affects everyone - from holidaymakers and shoppers, to business-owners and investors.

If the pound is worth less, the cost of importing goods from overseas goes up.

For example, as oil is priced in dollars a weak pound can make filling up your car with petrol more expensive. Gas is also priced in dollars.

Technology goods, like iPhones, that are made abroad, may get more expensive in UK shops. Even things that are made in the UK but from parts that are bought abroad can get much more expensive.

Very often, the pound is compared with the US dollar, given the huge size of the American economy.

It is also frequently compared with the euro, because of the UK's close trading relationship with the EU, but can be matched to any currency around the world.

Read more here

Nick Eardley
Chief political correspondent

Labour is convinced the chancellor made things worse over the weekend by hinting in a BBC interview that there could be more tax cuts to come.

The shadow chancellor - Rachel Reeves - said this morning he had "fanned the flames" by suggesting he was just getting started.

Reeves has suggested this morning that she would be prepared to borrow to cover some tax cuts. But she argues the scale of government borrowing is the problem.

Nerves about the levels of borrowing are not confined to the opposition. Some Conservative MPs are worried too.

But there is little sign ministers will budge. They are convinced the plan to cut taxes will stimulate economic growth.

Image source, Getty Images

Labour's Shadow Chancellor Rachel Reeves claims the chancellor has "fanned the flames" of the fall in sterling by suggesting more tax cuts were coming.

Speaking on Radio 4's Today programme, she says: "I think many people had hoped over the weekend things would calm down.

Reeves said the government was "gambling all of our money".

Suranjana Tewari
Asia business correspondent

The UK Chancellor's historic tax cuts are having an impact far and wide.

Investors in Asia have been selling off their pounds in favour of the stronger dollar and other currencies.

They're losing confidence about growth in the UK and are concerned the measures will stretch the government’s finances to their limit.

And with the British government planning to cut taxes, there are fears inflation won’t be brought under control, which could mean higher interest rates going forward.

That would make the cost of borrowing more expensive, and hurt Asian currencies and equities.

Japan's benchmark Nikkei index closed down almost 3% after slipping to its lowest level since mid-July and other Asian markets also slumped on Monday.

But the pound is just one of many uncertainties facing investors and traders in Asia and what comes next is rattling them even more – slow growth or recession, even higher interest rates to tame inflation, potential intervention?

The pound was already under pressure after the dollar was boosted by the US central bank continuing to raise interest rates.

Other currencies are also under pressure in the region - the euro touched a fresh 20-year-low against the dollar in morning Asia trade.

Sir John Gieve, the former deputy governor of the Bank of England, says the fall in sterling is worrying.

Asked on Radio 4's Today programme whether the economic downturn will lead the bank to convene an emergency meeting, he says, "yes, that is what they'll have to do if they want to change base rates".

He adds that the bank will wish to avoid holding an emergency meeting "if at all possible" at a time earlier than their next scheduled meeting in November, as holding a series of meetings at predictable times was "part of the regime" put in place when the bank was made independent.

The pound plummeted in response to the Conservative government's huge tax cutting mini-budget, dropping sharply as Chancellor Kwasi Kwarteng spoke on Friday.

It then plunged again in early trading on Monday reaching $1.04.

Jane Foley, a currency strategist at Rabobank, said the sell-off showed investors were worried that some of the announced tax cuts would not be fully-funded.

The pound was already sliding against the dollar in the weeks leading up to the mini-Budget, partly down to the dollar's wider strength.

However our economics correspondent Dharshini David says that, as of Friday night, sterling has seen the second biggest slide against the dollar compared to the week before of any major currency. The worst affected was the Swedish krona.

Image source, .

Faisal Islam
BBC Economics Editor

The cost of UK Government borrowing surged again when markets reopened this morning, reaching their highest levels since August 2008.

The effective rate of interest on two-year and five-year lending reached 4.5%, amid investor concern about the UK government’s “mini-budget”.

The moves followed an early slump in the value of sterling to record lows against the dollar.

Financial markets are now pricing in interest rates rising 3% by spring next year to 5.5%.