Burnham's Bond Market Comments Spark Pound Sterling Weakness

UK Prime Minister Andy Burnham has repeated his claim that Britain should not be 'in hock' to bond markets, sparking renewed weakness in pound sterling. The Pound to Dollar exchange rate trades at 1.3267 (-0.50%) and the Pound to Euro rate at 1.1643 (-0.15%).

Burnham made his comments in an interview with the New Statesman, referencing his often-quoted 'in hock' comment from his time as mayor of Greater Manchester.

The remarks come at a time when bond markets are under significant pressure: last week saw the cost of long-term government borrowing rise to its highest level in 19 years, with August borrowing coming in at £18.3bn, £3.5bn above the Office for Budget Responsibility forecast.

Deutsche Bank has turned seller of sterling this week, citing a disappearance of the risk premium around UK fiscal policy, leaving the pound more exposed to a softer domestic and external backdrop.