Pound slides to fresh 14-month low; GSK buys US cancer firm for $1.15bn – business live
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The pound is on the slide again, as Rachel Reeves, the UK chancellor, returns to her desk after her trip to China. The dollar has jumped to the highest level in more than two years against a basket of major currencies, to peak at 108.98, extending last week’s rally, after a strong US jobs market report underscored the strength of the world’s largest economy.
Sterling fell more than 0.5% to $1.2128 against the dollar, the lowest in 14 months while the euro is at its weakest since November 2022 at $1.0275. The pound had a rough ride last week, as UK government bonds, known as gilts, sold off, pushing their yields higher, reflecting investors’ concerns about the UK’s public finances.
Bond yields rose sharply for governments worldwide, before falling back on Friday, after the last jobs report of the Biden administration showed the US labour market grew strongly in December. This morning, US and German yields are edging higher again.
UK officials will be monitoring closely moves in the price of government bonds after last week’s turmoil in global markets, when the yield – effectively the interest rate – on the 30-year bond hit its highest level since 1998. Expectations for Federal Reserve rate cuts have receded sharply, but also for UK rate cuts. Markets are awaiting US data on inflation on Wednesday.
