Yesterday saw UK bond yields grow additionally to 5.47%, a level we haven’t seen since back in 1998 – causing further weakness to GBP – especially to the USD which reach levels that hasn’t happened since back in October 2023.
Recent development with increasing bond yields is causing issues for the UK government and their budget. With already implemented tax increases, the governments other direction would have to be to cut spending. The recent performance from the UK economy with a decreasing economic growth, unemployment figures suggested to increase and inflation levels reaching higher levels, way above the target rate of 2% is causing all sorts of troubles for the government to dampen the economic escalation.
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