The pound has fallen to a record low against the dollar as the markets quickly react to the UK's biggest tax cuts in 50 years.

The sterling pound fell close to $1.03 before regaining some ground to stand at about $1.07 on Monday morning, UK time.

Chancellor Kwasi Kwarteng has promised more tax cuts on top of a £45bn package he announced on Friday.

If the pound stays at this low level against the dollar, imports of commodities priced in dollars, including oil and gas, will be more costly.

This comes at a time where the price of oil and gas is already at a staggering high due to conflict in Ukraine.

Other imported goods could also become significantly more expensive, which would further push up inflation that is already at its highest rate for decades.

Additionally, tourists visiting America will find that their holiday money does not go as far as it used to.

The drop in pound value has raised concerns that the government plan to borrow billions with aid in high inflation by forcing the Bank of England to raise interest rates even further.

This would raise monthly mortgage costs for millions of homeowners.

Exchange rates are commonly associated with swapping money for a foreign currency for travelling. People going on holidays will see that things will become more expensive if the pound remains at this low point.

On top of this, a fall in the pound affects household finances too.

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

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

Gas is also priced in dollars.

Furthermore, tech items like iPhones that are made abroad, may get more expensive in UK shops.

It's possible that even things that are made in the UK using parts that are bought abroad can become more expensive too.