Pound drops to 14-month low as UK bond yields rise and pressure mounts on Chancellor Reeves

The British pound has dropped to a 14-month low against the US dollar, now at about $1.226, amid a bond market sell-off. This decline raises concerns about UK assets and increases pressure on Chancellor Rachel Reeves. UK borrowing costs have risen again, with the yield on 10-year debt reaching 4.921%, the highest since 2008. Analysts note that rising bond yields and a falling currency indicate waning investor confidence in the government's fiscal management. Despite recent losses, the pound remains above its record low from the 2022 mini-budget crisis. Some experts suggest current market conditions resemble those of 1976, when the UK sought an International Monetary Fund bailout.