Pound drops hard as the gilt market comes undone

Fiscal worries are hitting the pound hard once again.

Cable is down more than a full cent in the past hour. The catalyst is a selloff in the UK bond market.

UK 30-year gilt yields are up 21 bps on the day to 5.44%.

There are rumors about the future of Chancellor of the Exchequer Rachel Reeves and the UK government is in damage control.

It comes after Reeves was crying in Parliament following a U-turn on to cuts in welfare. The lack of an appetite for fiscal austerity has the market worried about government finances.

That’s an ugly move with 10s up 20 bps and 2s up 9.6 bps as well.

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