British Pound continues decline as bond yields rise

The British Pound is continuing its decline, following a selloff that began yesterday. It is currently underperforming compared to other major currencies. This drop is attributed to technical factors rather than any specific news. The UK 10-year bond yield reached a new high, contributing to bearish sentiment in the bond market. This situation mirrors the market's reaction to the UK's "mini-budget" in September 2022, although the current decline is less severe. Concerns about ongoing stagflation in the UK are influencing market perceptions. Weak growth and persistent inflation are leading to speculation that the Bank of England may need to maintain higher interest rates for an extended period.