The British pound has depreciated significantly, falling to a 14-month low against the US dollar at approximately $1.23, a level last seen in late 2023. This decline coincides with a sharp rise in UK government borrowing costs, as the yield on 10-year gilts has reached 4.8%—the highest since the financial crisis of 2008.

The surge in yields reflects growing investor concerns over the UK’s fiscal health. The government’s pledge to reduce national debt is facing increased scrutiny amid mounting public spending pressures in key sectors such as health, education, and defense.