British pound plunges below $1.11 after new government announces tax cuts

The embattled British pound fell 1.6% Friday against the dollar, after the new U.K. government announced a radical economic plan in a bid to boost growth.

Sterling dipped as low as $1.1077 at 11:33 a.m. London time, around an hour after the measures were unveiled in the House of Commons.

The pound has been on a precipitous fall against the greenback this year, hitting levels this month that it was last at in 1985. Friday's measures were billed by the government as heralding a new era for the U.K. focused on growth, and included a mix of tax cuts and investment incentives for businesses.

The Bank of England said Thursday that the U.K. economy was likely already in a recession as it raised interest rates by 50 basis points.

The euro was also down against the dollar Friday morning, falling 0.8% on the day to $0.976 after a release showed the euro zone's Purchasing Managers' Index fell to 48.2 in September. S&P Global said it meant the bloc was likely to enter a recession.

The dollar has been boosted this year by equity market volatility and Federal Reserve interest rate rises.

This is a breaking news story, please check back later for more.