Pound drops to lowest level since November 2023 as borrowing costs rise

The pound has fallen to its lowest level against the US dollar since November 2023, dropping below $1.23. This decline is linked to rising UK government borrowing costs, with yields on 10-year and 30-year bonds reaching their highest levels in months. Investors are concerned about the UK's fiscal stability, as increased borrowing costs may force the government to cut spending or raise taxes. The situation mirrors the market reaction following the 2022 Mini-Budget, causing reduced demand for UK government bonds. A weaker pound affects holidaymakers, as they receive less foreign currency for their money. It may also impact the value of pensions and investments tied to overseas companies, as currency fluctuations can influence their worth.