The pound has dropped to a 14-month low amidst a bond-market sell-off, with concerns over UK assets impacting its value against the dollar.
Michael Brown warned about 'fiscal de-anchoring' in the UK, noting that rising yields and a falling currency indicate a loss of confidence in government fiscal control.
Despite the pound's recent fall, it is still above the record low after the 2022 mini-budget, where it nearly reached parity with the dollar.
Pimco's economist stated that while UK-specific factors influence rising yields, much of this is driven by increases in U.S. Treasury yields.
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