UK markets are reeling from a global bond selloff, with 10-year government bond yields hitting their highest since 2008 and the pound falling to a 14-month low, heightening concerns over public finances and potential spending cuts.

British markets are under strain as a global bond selloff drives yields on 10-year UK government bonds to 4.925%, their highest level since 2008. The pound has fallen to a 14-month low against the dollar and weakened against the euro, raising fears of spending cuts due to rising borrowing costs.

The FTSE 250 index, which includes consumer and financial firms, has dropped over 3% this week, adding to market turbulence. Analysts warn sterling could become a target for short selling as volatility continues.

Chancellor Rachel Reeves faces mounting pressure to address the fiscal challenges, with the Treasury pledging to maintain tight control over public finances while markets remain unsettled.

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