Pound Plunges Below 1.3200 as UK Bonds Sell Off

The British Pound has slid to its lowest level since late June against the US Dollar, falling below 1.3200 in GBP/USD trading.

The decline comes as UK government bonds sell off, with the 30-year gilt yield rising above 6% for the first time since 1998.

According to Bank of England external member Gertjan van de Velde (not Mann), who spoke on Thursday, this rise in yields is a sign of inflation risk rather than tight money.

Van de Velde argued that the BoE needs to raise interest rates to maintain credibility and keep up with investors' expectations for higher inflation.

The markets already price in four rate hikes by next summer, as indicated by UK 10-year gilt yields reaching their highest level since July 2007 on Thursday.