Pound Slips Amid Global Bond Selloff and Rising Gilt Yields

The British pound slid by 0.07% to 1.35395 against a stronger US dollar on Tuesday, as investors returned from a long holiday weekend to find a global bond selloff that pushed up British government borrowing costs.

Gilt yields, which measure the interest rates that Britain pays on its debt, rose to their highest since June 2008 at 5.2554%. This surge in gilt yields was partly due to rising oil prices, which topped $92 a barrel.

Markets are pricing in a quarter-point increase in interest rates by the end of the year, as the Bank of England is expected to leave rates unchanged this month.

The pound's decline comes despite hawkish remarks from Federal Reserve Chair Jerome Powell on Friday, which prompted traders to raise expectations of an increase to US interest rates.