“The pound fell to its lowest level since the end of 2023 on Thursday under pressure from a global bond selloff that pushed the cost of British government borrowing to a 16-year high, reigniting concerns about Britain’s finances.”, — write: epravda.com.ua
The pound fell to its lowest level since the end of 2023 on Thursday under pressure from a global bond selloff that pushed the cost of British government borrowing to a 16-year high, reigniting concerns about Britain’s finances. Reuters writes about it. Sterling was last down 0.6% at $1.2295, its lowest level since November 2023, while the cost of hedging against bigger price swings over the next month jumped to its highest level since the March 2023 banking crisis. Global bond yields have soared this week amid concerns about rising inflation, diminishing prospects for interest rate cuts, uncertainty over how U.S. President-elect Donald Trump will pursue foreign or economic policy, and the prospect of trillions of dollars in additional debt.Advertisement: Particularly hard hit UK market. The yield on the 10-year gilt bond rose a quarter of a point this week alone to its highest level since 2008 as confidence in Britain’s fiscal outlook eroded. Sterling has been one of the best performing currencies against the dollar over the past few years, largely thanks to the Bank of England’s policy of keeping UK interest rates on hold longer than other major central banks, creating an incentive for foreign investors to earn interest on British assets. Trump’s proposed policies on trade tariffs and immigration risk increasing price pressures in the US, thereby limiting the Federal Reserve’s ability to cut rates, which has sent the dollar soaring against nearly all other currencies.