UK Conservative Party members reportedly say the central bank may need to make an emergency rate hike to stem the pound's decline and calm markets over mini-budget

• UK conservative party members said the BoE may need to make an emergency rate hike, Bloomberg reported.
• Such a move by the central bank looks increasingly likely, analysts believe.

Members of the Conservative Party in the UK say the Bank of England may need to increase interest rates on an emergency basis to calm market nerves as the mini-budget pushes the pound to a record low against the dollar, Bloomberg reported Monday.

Lawmakers in the ruling party said the central bank making such a move looks increasingly likely, the report said, citing unnamed sources.

The pound during Asian trading Monday sank by nearly 5% to $1.0350, the lowest level since 1971 when the UK switched to a decimal-based currency system. The pound has since recovered some ground, trading at $1.0855.

The pound began sliding on Friday after the government introduced its "Growth Plan" aimed at a 2.5% trend of economic expansion, a so-called mini-budget that includes proposals for the largest tax cuts since 1972. The plan has spooked investors who fear it may send inflation soaring even further and sharply increase government debt.

The central bank's next meeting was scheduled for November 3. Policy makers have raised rates seven times since December to control inflation hovering close to 10%. The most recent rate hike occurred last week when the benchmark rate was pushed up by 50 basis points to 2.25%.

The growth plan was introduced by finance minister Kwasi Kwarteng under the government of Liz Truss, who was named prime minister earlier this month.

"When you start getting an emergency anything, the political optics are dire," one former minister, who asked not to be named discussing internal party discussions, told Bloomberg.

Another unnamed lawmaker said the mini-budget does not have widespread support among their parliamentary colleagues, including members of the UK's new government. There has been some discussion about voting down the plans but the idea is not yet mainstream among Tory members of parliament, the report said.