POUND STERLING WEAKENS FOLLOWING CHANCELLOR’S TEARS – It fell nearly 1% while government borrowing costs spiked following an emotional Rachel Reeves
The pound continued its slide, even after Sir Keir Starmer insisted that Rachel Reeves will remain Chancellor “through to the next election.”
The Pound Sterling fell nearly 1% during the day, while government borrowing costs spiked, following an emotional appearance by the Chancellor in the Commons. Market jitters intensified after the Prime Minister initially failed to publicly back Reeves when questioned in Parliament, though he later offered his support.
Despite Starmer’s statement, the pound and gilt yields—reflecting the returns promised to investors on government debt—did not rebound, marking one of the most significant market moves since the turmoil of Liz Truss’s mini-Budget.
Mohamed El-Erian, chief economic adviser at Allianz, commented: “Markets are worried that a new chancellor might not stick to the current fiscal rules.”
In early trading, sterling slipped 0.1% against the dollar to $1.364 and was down 0.2% against the euro, trading at 86.5p.
