The pound sterling falls to its lowest level in 14 months as government bonds rise

The pound sterling fell to its lowest levels since late 2023 on Thursday, under pressure from a sell-off in global bonds that drove the British government’s borrowing costs to their highest levels in more than 16 years, reigniting concerns about Britain’s finances.

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Yahoo Finance reported: The Economist said that the pound sterling fell by 0.6% to reach 1.2295 per dollar, after touching its lowest level since November 2023 earlier today, while the cost of hedging against greater price fluctuations jumped over the next month to reach its highest levels since the banking crisis. In March 2023.

 

Global bond yields recorded an increase this week against the backdrop of concerns about rising inflation and the lack of chances of a decline. Interest rates, uncertainty about how the administration of US President-elect Donald Trump will conduct foreign or economic policy and the possibility of facing trillions of dollars in additional debt.

 

The UK market has also been particularly hard hit. , as British ten-year bond yields rose by a quarter of a point this week alone to their highest levels since 2008, with confidence in Britain’s financial outlook deteriorating.

 

Finance Minister Rachel is facing Reeves, first A major test for it, as turmoil in the bond market may force it to cut future spending.

 

Usually, rising British bond yields support the pound, but at the moment, This relationship collapsed, reflecting investors’ concern about the country’s finances.

 

This prompted the British Ministry of Finance to confirm – in a statement issued late yesterday – that it would maintain what it described as " ;grip iron" On public finances.

 

The pound sterling has been one of the best-performing currencies against the dollar in the past two years, largely due to the Bank of England’s policy of keeping interest rates in the Kingdom The UK economy is stagnating, while the labor market is deteriorating rapidly. , as employers grapple with tax increases in The budget for last October, which included the largest overall tax increases since 1993.

 

The yield on 30-year British Treasury bonds reached their highest levels since 1998, reflecting a rise Global long-term returns.

 

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