The British pound extended losses to $1.215, its lowest since November 2023, and following a 1.7% slump in the previous week, as fiscal concerns and surging gilt yields weighed on UK assets. Traders are increasingly betting on further declines, with options data showing strong demand for contracts below $1.20 and even as low as $1.12. Last week’s turmoil in UK markets, fueled by sticky inflation, high borrowing, and concerns over Donald Trump’s policies, left sterling vulnerable and prompted comparisons to the 2022 market meltdown. The pound’s slide was exacerbated by stronger-than-expected US jobs data, raising fears of limited Bank of England rate cuts to support the economy. Traders scaled back their forecasts for rate reductions to 43 basis points of cuts by December 2025, down from the 50 basis points expected on Friday.
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