UK borrowing costs rise again, with analyst warning ‘things are also getting rather ugly’
The pound has fallen to a 14-month low against the US dollar as the sell-off in the bond market fuelled investors’ anxiety over UK assets and piled further pressure on the chancellor,
UK borrowing costs rose again on Thursday morning, despite the government’s efforts to calm the markets. Reeves took the rare step of issuing a public statement for the second successive day on Wednesday night, He said the dynamic of bond yields moving higher while the currency falls was a sign of investors “losing confidence in the government in question’s ability to exert control over the fiscal backdrop.
Chris Turner, the global head of markets at ING, said: “Our best understanding of yesterday’s sterling sell-off is that the global bond market sell-off touched a raw nerve in the gilt market and that then the gilt spread widening prompted investors to cut back on overweight sterling positioning.
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