Sterling had already fallen around 0.5% - going from $1.193 to $1.1850 - by the time the chancellor rose to his feet in the Commons.

But after he had finished, it had fallen to the $1.183 mark - down about 0.6% - and continued to fall to $1.180 (down almost 0.9%) by 12.45.

The FTSE 100 was down 0.65% at 12.15pm, while the more domestically-focused FTSE 250 had fallen almost 0.3%.

Marcus Brookes, chief investment officer at Quilter Investors in London, said: "Today's autumn statement has painted a bleak picture for the UK.

"Markets originally reacted well to the steady hand of Jeremy Hunt.

"They will continue to give him the benefit of the doubt and see the impact of this plan, however, there is also a chance that they see this as an overcorrection and that the measures could stifle what economic growth was present."

Shares in Shell and BP were down 0.45% and 0.65% respectively following news that the energy profits levy would be increased from 25% to 35% from next year.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ''Share prices of energy generating companies have retreated rapidly as it became clear that the Treasury will scoop up more money which has been falling into their profit baskets as gas prices soared.

"A much bigger slice of profits of energy giants such as BP and Shell will now also be raked in, with the energy profits levy increased from 25 per cent to 35 per cent.

"The door was inched open even further on the case for a windfall tax following comments made by Shell's outgoing boss, Ben Van Beurden, that the tax burden had to fall on the energy sector to help the poorest in society.

"That's partly why the reaction has been relatively muted in terms of their share prices."

The windfall tax will also be extended to electricity generators but shares in many of these companies were up, perhaps reflecting the fact that - with a number of stories foreshadowing this - that change was also priced into markets.

Mr Hunt said the economy is expected to shrink next year, a forecast that chimes with the Bank of England's earlier prediction of a two-year recession.

But Mr Hunt said the UK would bring down its government debt as a percentage of GDP within five years under his plans.

Government bonds edged lower, while bond yields - which were already up before Mr Hunt's statement - rose further.

The losses were modest, however, compared to the sharp sell-off sparked by the short-lived "mini-budget" announced by Liz Truss and Kwasi Kwarteng in September.

The benchmark 10-year gilt yield was last up seven basis points to 3.21%, while the two-year yield rose 12 basis points to 3.104% having traded at around 3.07% just before Mr Hunt started speaking.