Sterling Slumps as Gilt Yields Soar, Oil Prices Reach New Highs

The British pound (GBP) has weakened against the US dollar (USD), falling 0.07% to 1.35395, as gilt yields rise to their highest level since June 2008. The move is driven by a broader bond selloff and higher oil prices above $92 per barrel.

The Bank of England is expected to keep interest rates at 3.75%, despite domestic data showing slowest manufacturing growth since March and lowest mortgage approvals since January 2024.

The UK's strained public finances remain a central market concern, with gilt yields among the highest in the developed world. Prime Minister Andy Burnham's plans for funding his agenda before the October budget will be closely watched by investors.