Sterling falls to lowest level in more than a year

The pound fell to its lowest level in more than a year, British stocks fell and British government bonds extended losses for a fourth day, amid concerns that the Labour government will not be able to control the deficit amid rising borrowing costs.

The pound fell for a third straight session, by 1% to $1.2239, its lowest since November 2023. Government bonds also fell sharply at the open, with the yield on the 10-year note rising 13 basis points to 4.92%. The local FTSE 250 index fell by 1.1%, reaching its lowest level since April and heading for its worst three-day performance since August.

Citigroup described the pound as the “great British peso,” referring to the most volatile currencies in emerging markets.