Fears are growing that the pound could fall to a record low and even parity with the dollar after plunging more than 3% and borrowing costs in the UK soared more than ever on Friday.

Mr Odey said: “The pound has been vulnerable all year and there must be a chance of it hitting parity, but there are a lot of things I like about Kwasi’s budget. It’s bravely conservative.

However, the trader – who is believed to have sold short UK debt – said he would become “long-term bullish” on UK assets if a Labor government was averted.

Meanwhile, Mr Bailey is expected to discuss the chaos of the mini-budget market with the Chancellor in the coming days at their newly instituted bi-weekly meetings.

The historic rout of the pound and UK debt is expected to top the meeting agenda after fueling speculation of emergency action by the Bank.

Some City analysts have warned that the Bank of England may be forced to intervene to shore up sterling ahead of the next monetary policy meeting scheduled for November.

Threadneedle Street declined to comment on the speculation. Its chief economist Huw Pill could provide the first clues as to how the Bank will react on Tuesday when he appears on a panel to talk about monetary policy at a Barclays event.

Markets are now betting that the Bank will raise rates by 1 percentage point in November, the biggest hike since Black Wednesday in 1992, to head off inflationary pressures.

Investors are rushing to hedge against the pound’s wild swings in the coming weeks as betting on the currency hitting new highs against the dollar increases. On Friday, the pound’s one-month implied volatility — a market-based indicator of investors’ expectations of the currency’s movements — hit its highest level since the start of the pandemic.

Speculators have also stepped up their opposition to the pound this month. New weekly trading data revealed that investors amassed a £3.4 billion bet against the pound, although short positions anticipating a fall have eased from September’s high.

Derek Halpenny, head of global markets research at MUFG, said “The chancellor’s surprise additional income tax cuts have heightened concerns about adding stimulus to an economy currently experiencing a slump. highest inflation rate in the G10”.

He said: ‘There is certainly no ‘feeling of happiness’ in this tax giveaway and rather seems to have increased the level of uncertainties which were already very high.

Confidence has been dulled for the pound and UK assets in recent weeks, with market concerns fueled by a combination of recession fears and higher borrowing.