The pound surged along with UK stocks and bond prices on Thursday after reports the British government is discussing making changes to the fiscal plan announced last month.
Sky News reported the government is looking at which parts of the tax-cutting package might be ditched in a further U-turn by Prime Minister Liz Truss.
At 1145 GMT the pound was up 1.4% against the dollar at $1.12540, having surged as much as 1.8% and touched its highest in a week.
The pound was last up 0.90% up against the euro at 86.620 pence.
Britain's mid-cap 250 index rose 2.6%, while the blue-chip FTSE 100 was up 0.63%.
Long-dated UK gilt prices, which have been at the centre of the market meltdown of the last couple of weeks on the back of the government's proposal to borrow heavily to pay for billions in tax cuts, rallied sharply, pushing yields down by as much as 42 basis points to 4.476%.