Pound falls to 14-month low as bond sell-off piles pressure on Rachel Reeves
GuardianJan 08
UK: Pound Falls to Lowest in Over a Year, Borrowing Costs Rise
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Above: UK chancellor of the exchequer, during the annual Confederation Of British Industry (CBI) conference in London, UK, on Nov. 25, 2024. Image copyright: Chris Ratcliffe/Bloomberg/Contributor via Getty Images
The Facts
The Pound Sterling fell to $1.226 against the US Dollar on Thursday, marking its lowest level since late 2023, while government borrowing costs reached their highest point since 2008.
The yield on 10-year UK government bonds climbed to 4.81%, the highest since the 2008 financial crisis, while 30-year gilt yields rose above 5.3%, reaching levels not seen since 1998.
The Spin
Left narrative
The pound’s fall and rising borrowing costs highlight the challenges of a fragile economy, but Labour’s focus on stability offers a chance for a new direction. By rejecting austerity-driven ideology, Labour can champion investment in jobs, green growth, and public services to rebuild the economy sustainably. While tough choices remain, bold action on fair taxation and strategic spending can restore confidence, ensuring working people benefit from a stronger, fairer future.
Right narrative
Labour’s economic strategy has left the UK vulnerable, with rising interest rates, a weakened Sterling, and surging bond yields signaling investor skepticism. Reeves’s refusal to put the economy over ideology has undermined growth, while her inability to instill market confidence has compounded the crisis. Labour’s cautious, hesitant approach risks dragging the UK into economic free-fall, and despite only six months on the job, it is already time for the Chancellor to go.
