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Pound Stagnates Amid Fiscal Woes, Tax Hikes Loom

9/26/2025

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Summary

Story summary

The pound sits near $1.34495 as markets weigh government finances and weak gilt demand.
Bond auction showed tepid demand with a bid-to-cover 2.90 for 4.5% 2034 gilts.
The 10-year gilt yield rose to 4.74% amid fiscal skepticism and a £30 billion shortfall.
Analysts warn the shortfall and high yields could push Chancellor Rachel Reeves to raise taxes in November.

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Story summary

The pound sits near $1.34495 as markets weigh government finances and weak gilt demand.
Bond auction showed tepid demand with a bid-to-cover 2.90 for 4.5% 2034 gilts.
The 10-year gilt yield rose to 4.74% amid fiscal skepticism and a £30 billion shortfall.
Analysts warn the shortfall and high yields could push Chancellor Rachel Reeves to raise taxes in November.