The recent volatility in UK markets, primarily driven by global factors, particularly a rise in US bond yields, masks deeper structural weaknesses in the UK economy.
Higher US yields have led to increased borrowing costs in the UK, significantly impacting GDP growth and creating a challenging environment for the government to respond.
Despite facing higher yields, the British pound's depreciation adds pressure, potentially leading to stagflation, a scenario more typical in developing economies.
The urgency for policy action in the UK is underscored by the need to address both rising yields and the weakening currency's inflationary effects.
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