Sterling opens in red to both EUR and USD this morning with mounting concerns for the government and their bond yields. Yield levels reaching its highest level since 1998 of 5.691%.
While they’re trying to make bonds attractive for investors with higher returns, the bigger issue is in the underlying debt the government has created that now is growing. In the first half of 2025 we did see tax increases in the UK, and many experts suggesting that ahead of the autumn budget further tax increases will be required from Chancellor Rachel Reeves to address the already mounting deficit.
GBP saw losses of around half a percent to the EUR in the opening hours, while GBP/USD were the more impacted.
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