Pound falls further as borrowing costs rise again

The pound fell to its lowest value against the dollar since November 2023, as government borrowing costs continued to rise with the yield on 10-year gilts hitting its highest level in 17 years. Global concerns around inflation and interest rates, exacerbated by former US President Donald Trump’s re-election and strong jobs data, have contributed to the situation. Chancellor Rachel Reeves defended her economic ties with China amidst rising gilt yields, while facing questions about achieving fiscal targets amid growing debt costs. The government’s focus on economic growth has been met with zero growth figures, leading to concerns about job cuts and price rises, as well as criticism and pushback from businesses and unions over employment rights legislation and AI plans.

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