UK Treasury reports orderly markets as pound hits lowest level since November

UK financial markets are described as "orderly" by the Treasury, despite the pound falling to its lowest level since November 2023. Government borrowing costs have risen, increasing pressure on the Labour Government's fiscal plans. The pound dropped nearly 1% to just under 1.23 US dollars, while the FTSE 250 stock index hit a nine-month low. Yields on government bonds also rose, reflecting higher borrowing costs, with 10-year gilt yields reaching their highest since 2008. Concerns over rising government debt and potential stagflation have led to investor worries. The Chancellor may need to consider spending cuts or increased revenue to meet fiscal rules, as the government faces challenges in managing public finances.