(Bloomberg) -- Chancellor of the Exchequer Kwasi Kwarteng must do more to reassure the markets about his plans for the economy after a sell-off sent the pound crashing to an all-time low against the dollar, Gerard Lyons, an external adviser to Prime Minister Liz Truss, said.

Lyons’s comments came as the pound plunged almost 5% in the wake of Kwarteng’s promise to press on with even more tax cuts after unveiling the biggest tax giveaway in half a century on Friday. That stoked fears that the new Chancellor’s fiscal policies will send inflation and government debt soaring.

“He needs to reaffirm that tax cuts are only part of the story, not the full story,” the economist said Monday in a Bloomberg Radio interview. “What they’re following is a supply-side agenda.”

Even so, Lyons said the UK government doesn’t need do a “U-turn,” and added that it’s incumbent also on the Bank of England to take action.

“It’s not just down to the Chancellor, it’s also down to the central bank to try and get ahead of the curve, to try and address the market concern,” Lyons said, pushing for further interest rate rises from the Bank of England. “We need to move away from cheap money.”

Lyons, who is also chief economic strategist at online wealth manager Netwealth, said Kwarteng’s fiscal package had been targeted at a domestic and business audience, but didn’t do enough to calm investors.

“Markets were still not convinced that his fiscal easing was necessary, non-inflationary and affordable,” Lyons said. “It’s quite clear from the market reaction that those concerns were not fully addressed.”

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