TOKYO, Sept 26 (Reuters) - Sterling tumbled to a record trough on Monday as traders scampered for the exits on speculation the new government's economic plan will stretch Britain's finances to the limit. Labour's Rachel Reeves accused ministers of recklessly gambling with the nation's finances and of spooking the markets with the 'scale' of Government borrowing to pay for measures including axing the top rate of income tax. Meloni's comments during the election campaign that she would respect EU budget rules reassured markets and a slight underperformance by Italian bonds on Monday could be due as much to global market unease than a reaction to the result.

The party has said it won't jeopardise access to the programme but changing plans may put the funds, worth 19 billion euros ($18.3 billion) or 1% of GDP, at risk, said Rabobank economist Maartje Wijffelaars before the vote. MILAN/LONDON, Sept 26 (Reuters) - Italy's right-wing bloc should have a solid majority in both houses of parliament following Sunday's election, potentially giving the country a rare chance of political stability after years of upheaval and fragile coalitions.

The dollar built on its recovery against the yen following the shock of last week's currency intervention by Japanese authorities, as investors returned their focus to the contrast between a hawkish Federal Reserve and the Bank of Japan's insistence on sticking to massive stimulus. "The poor situation in the UK exacerbates support for the USD, (which) can track higher again this week," Joseph Capurso, head of international economics at Commonwealth Bank of Australia, wrote in a report.

But Viraj Patel, a foreign exchange and global macro strategist at Vanda Research, said markets will have been disappointed by the statement, adding that he believes it will last only a day or two before the Bank of England is forced into action. The fresh lows came even as the central bank said it will reinstate foreign exchange risk reserves for some forwards contracts, a move that would make betting against the yuan more expensive and slow the pace of its recent depreciation. A source told the Daily Telegraph: 'The Home Secretary does not believe that reducing net migration needs to mean we go to lower growth.

You can solve the economic bottlenecks that need to have higher skills but at the same time bring down aggregate migration.'  Also, the right is not seen wining a two-thirds majority in both houses of parliament that would allow the constitution to be changed without a referendum, which could have caused some angst since the constitution protects issues related to Italy's EU membership. Samuel Tombs, chief economist at Pantheon Macroeconomics, this evening warned that the average UK household's monthly repayments could soar from £893 to £1,490 - a £597 rise. He said: 'If mortgage rates rise to 6% - as implied by markets' current expectations for Bank Rate - the average household refinancing a 2yr fixed rate mortgage in the first half of 2023 will see *monthly* repayments jump to £1,490, from £863.

The pound recovered ground during the London session but was still down 1.