The value of the pound has fallen to a record low against the dollar. It has also fallen against the euro.
It comes after the UK government announced large tax cuts, to be paid for by borrowing billions of pounds.
The pound's value affects everyone - from shoppers to business owners and investors.
This is because when the pound is worth less, the cost of goods imported from overseas goes up.
For example:
Gas - the price is largely based on the dollar
Petrol - oil is priced in dollars, so a weak pound can make filling up your car more expensive
Food prices - the UK imports 46% of the food it consumes
Technology, like mobile phones, or cars made abroad, could get more expensive
Even things made in the UK can cost more if parts are bought from other countries.
And the pound's value has an impact when you travel abroad. If it buys less of the local currency, then things will be more expensive.
Overall, the falling pound could increase the cost of living by 0.5 percentage points next year, according to Samuel Tombs of research firm Pantheon Economics.
What is inflation and why are living costs rising?
A weak pound can, however, boost businesses which export to other countries as their goods become cheaper and more attractive to foreign buyers.
Why has the pound tumbled?
Investors around the world buy and sell huge amounts of foreign currency. The aim is to profit by buying a currency that goes up in value more than the one sold.
The pound plummeted on Friday after the government announced huge tax cuts in its mini-budget.
It then plunged again in on Monday, reaching $1.04 - the lowest level the pound has ever been against the dollar.
The cause is investors selling the pound because they have doubts about the government's plans, said Jane Foley, of Rabobank.
"They're worried that some of these tax cuts that have been announced aren't going to be fully funded," she said.
These same concerns have also pushed up the cost of government borrowing.
The interest on 10-year bonds - which governments sell to investors - has risen from just over 1% in January, to more than 4% now.
Some investors believe the government's tax cuts will lead to people spending more, which will push up prices. So in an effort to limit price rises, the Bank would raise interest rates sooner and faster.
However, raising rates could leave people with less money, as mortgages and loans become more expensive.
"The markets have decided that [Mr] Kwarteng's tax cuts will lead to higher interest rates and that a deterioration in the public finances will undermine the UK's long-term growth prospects", said Paul Dales from Capital Economics.
The Bank of England isn't set to hold its next interest rate meeting until November, but there is speculation it could act sooner.
In a statement on Twitter, the Bank said it was monitoring developments and would "not hesitate to change interest rates by as much as needed to return inflation to the 2% target".
Source: BBC 27 Sept.