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The British pound could plunge further and reach parity with the US dollar after hitting record lows, according to hedge fund manager Crispin Odey.

On Monday, the pound sterling hit an all-time low against the dollar of $1.035 but slightly recovered to reach $1.067 on Tuesday. Still, it’s still down from $1.40 in June 2021.

"I don't think you can start getting bullish on sterling," the founder of Odey Asset Management told the Financial Times, adding that "it's so close" to parity. 

Odey's flagship European hedge fund is up about 145%, according to the FT, mainly after shorting government bonds like British gilts.

He also told the FT that short positions on the pound have also been helpful, while bets against British bonds are "the gifts that keep on giving." But Odey added that Britain's currency and bonds were getting less attractive to short.

British debt, along with the pound, tanked after the UK's new chancellor announced a plethora of prospective tax cuts and hinted more were coming. Investors feared the cuts would hike not only government debt but also worsen inflation, causing the Bank of England to raise interest rates more aggressively and potentially drag the UK economy into a deep recession. 

The yield on Britain's five-year bonds skyrocketed more than 51 basis points on Monday to 4.579%, overtaking the likes of Greece and Italy. Yields on five-year Greek and Italian bonds were 3.978% and 4.079%, respectively.

That indicates markets see more risk in the UK's medium-term gilt than in equivalent bonds for the most heavily indebted eurozone countries.