Government borrowing costs return to levels they were at before Chancellor’s crying session

On Friday morning there was little change against the dollar trading at $1.3663 over concerns of the UK’s financial position and Donald Trump’s tariffs has also weighed on investor sentiment.

Government bonds rose as the government has increased borrowing following Rechel Reeves crying session on Wednesday during Prime Minister’s Questions as Sir Keir Starmer refused to rule out the Chancellor staying in her position.

Following this he said that the Chancellor will remain as the Chancellor “into the next election.”

Hargreaves Lansdown’s Streeter said, “With the government intent on projecting an image of unity, it’s helped stabilise the bond markets.

“Ten-year gilt yields, assessed to judge UK government borrowing costs, have returned to levels they were at before Rachel Reeves’ distressed appearance in parliament and sterling has continued to claw background.

However, there is speculation that given the difficulties the government has faced in finding savings from welfare budgets, tax rises are likely in the autumn budget,” she added.

Bets are rising that the Bank of England will cut interest rates more quickly with a reduction in August increasingly on the cards. So, that’s kept a bit more downwards pressure on sterling.