While the pound plummeting to a record low causing soaring interest rates has been a terrifying prospect for many families up and down the country, there are some Liz Truss supporters along with a Tory donor that are said to be profiting from the sterling shortfall. Crispin Odey, a hedge fund boss who employed Kwasi Kwarteng as a political consultant more than a decade ago, placed a bet believing traders underestimated how long inflation would peak - with his firm now raking in millions.
The 63-year-old placed a similar bet after the Brexit vote which saw him make £220 million overnight, as previously revealed by The Mirror in 2019. Now, he has overseen a 145 per cent rise in his company's main fund this year, according to sources.
Mr Odey, who has donated more than £75,000 to the Tories since 2017, and also ploughed £10,000 into former PM Boris Johnson's leadership campaign, said his policy of betting against the pound had been "helpful".
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It comes as there is growing frustration among Tory backbenchers at City investors making a mint off the trembling pound by gambling on high inflation.
The Prime Minister and her Chancellor, Kwasi Kwarteng, sent the markets into a frenzy last week following the unveiling of the mini-budget, which saw the new government outline £45 billion of tax cuts while committing to at least £70 billion of borrowing.
As a result, the sterling fell to its lowest level in 37 years as investors cast doubts over the UK's economic policy.
Traders are reaping the rewards for "shorting" the pound by gambling on what they can sell at a high price before buying it back after its value plummets.
It was last week reported by Reuters that Mr Odey's firm, Odey Asset Management - which manages around £4 billion in assets - has seen its main fund soar by 145 per cent by betting against government bonds as inflation soars.
The investor denied that his connection to the new Chancellor had given him any trading advantages - telling the Financial Times : "There's a mad idea that one's behind every twist and turn.
"All I can do is catch the wind now and again. I saw sterling collapse coming".
He told the newspaper his recent tactic had been "helpful", adding: "The market has been a long way from where inflation was."
Mr Odey told Bloomberg News that his returns were "not bad", stating: "Strangely, you had to be very brave this year to make money because the consensus was so far away from that."
He also told The Telegraph that he was so confident about his prediction that he spent the day shooting grouse - a pastime he loves.
"The truth is that I didn't do anything on Friday. I shot. I haven't put a trade on for the last two months," he told the paper.
"I didn't need to. This was easy to see from miles away and didn't depend on Kwasi coming into government or anything else."
Odey Asset Management declined to comment.
Meanwhile, there was a general expectation among hedge fund managers that attended a dinner last week that Mr Kwarteng's mini-budget would spark doom for the UK currency.
A source told The Sunday Times: "They were all supporters of Truss and every one of them was shorting the pound."
Traders betting against the pound are said to be causing anger in Tory circles.
Former Cabinet minister John Redwood told MailOnline they were "trying to make money out of bad news".
"You should completely ignore it if you're the government or Bank of England. These are extremely volatile markets with some very large players clearly running very big bear positions, and other players coming in to take them on," he said.
"There are big players trying to make money out of bad news... if the Pound gets too cheap people should go and buy it, simple as that."
Amid the turmoil that followed the crashing pound, with soaring interest rates and almost 300 mortgage lenders pulling out of new deals, the International Monetary Fund (IMF) urged the government to reconsider its plans for tax cuts over fears it could drive up inequality and put more pressure on prices.
But Mr Kwarteng will be stepping up efforts to reassure the City about his economic proposals.
The pound dropped to $1.03 in early trading on Monday morning - its lowest level against the US dollar since decimalisation in 1971.
By Wednesday morning, the Bank of England announced it has launched an emergency UK government bond-buying programme to prevent borrowing costs from spiralling out of control and stave off a "material risk to UK financial stability".
The Bank announced it was stepping in to buy government bonds – known as gilts – at an "urgent pace".
The Bank said: "Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability.
"This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.
"In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses."
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