A hedge fund boss who employed Kwasi Kwarteng as a political consultant more than a decade ago has seen his firm make millions by betting against the tumbling pound.
Tory donor Crispin Odey - who The Mirror previously revealed made £220 million overnight after the Brexit vote - has overseen a 145% rise in his company's main fund this year, sources said.
Mr Odey, who has donated more than £75,000 to the Tories since 2017, and also ploughed £10,000 into former PM Boris Johnson's leadership campaign, said his policy of betting against the pound had been "helpful".
There is growing Tory anger at city investors making a mint off the plummeting pound by gambling on high inflation.
It comes as sterling hit its lowest level on record following Mr Kwarteng's mini-budget last week, which saw the new government outline £45 billion of tax cuts while committing to at least £70 billion of borrowing.
Traders are reaping the rewards for "shorting" the pound by gambling that they can sell at a high price before buying it back after its value plummets.
It was last week reported by Reuters that his firm Odey Asset Management - which manages around £4 billion in assets - has seen its main fund soar by 145% by betting against government bonds as inflation soars.
According to the register of members' interests, Mr Kwarteng was paid £10,000 for giving political advice to the company between February and August 2011.
Mr Odey denied that his connection to the new Chancellor had given him any trading advantages - telling the Financial Times : "There's a mad idea that one's behind every twist and turn.
"All I can do is catch the wind now and again."
But he told the newspaper his recent tactic had been "helpful", adding: The market has been a long way from where inflation was.”
Mr Odey told Bloomberg News that his returns were "not bad", stating: “Strangely, you had to be very brave this year to make money because the consensus was so far away from that.”
Odey Asset Management declined to comment.
Liberal Democrat Cabinet Office spokesperson, Christine Jardine, said: "This is the reality of Kwasi Kwarteng's out of touch and shambolic budget.
"The Conservative Party's City donors are boasting about making a fortune from the crashing pound, while hard-working families see their taxes hiked year after year.
"People are rightly angry that Conservative donors are profiting from our national humiliation. It shows it's one rule for them and another for the rest of us.
"Every Conservative leaflet that comes through people's doors, funded by the likes of Odey, will be a reminder of how badly this government has failed us."
In 2019 The Mirror reported that Brexiteer Mr Odey, who gave £870,000 to the Leave campaign, made £220million overnight as sterling slumped after the 2016 referendum result.
Traders betting against the pound are said to be causing ire in Tory circles.
Former Cabinet minister John Redwood told MailOnline they were "trying to make money out of bad news".
'You should completely ignore it if you're the government or Bank of England. These are extremely volatile markets with some very large players clearly running very big bear positions, and other players coming in to take them on,' he said.
'There are big players trying to make money out of bad news... if the Pound gets too cheap people should go and buy it, simple as that.'
The latest currency plunge means the pound had reached its lowest ever level against the dollar since decimalisation in 1971.
It had already dropped to fresh 1985 lows on Friday after the Chancellor announced huge tax cuts in his Mini-Budget, which would be funded by adding tens of billions of pounds to the national debt.
Undeterred, the government yesterday said further announcements will follow on support to the UK's financial sector - after the controversial decision to once again allow unlimited bonuses for bankers.
Measures will be outlined next month, while Mr Kwarteng will outline his medium term fiscal plan on November 23, with a full budget to follow in the spring.
The Bank of England yesterday warned it would not hesitate to raise them "by as much as needed" in future to get inflation under control.
The Treasury said: "Next month, the Chancellor will, as part of that programme, outline regulatory reforms to ensure the UK’s financial services sector remains globally competitive.
"He will then set out his Medium-Term Fiscal Plan on 23 November.
"The Fiscal Plan will set out further details on the government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium-term."
The statement will be accompanied by a forecast from the Office for Budget Responsibility (OBR), which was missing from his announcement in the House of Commons on Friday.
Labour has vowed to undo Mr Kwarteng's tax cut for Britain's highest earners, and use the cash to support the NHS.
