Wednesday 03 September 2025 6:45 am
| Updated:
Wednesday 03 September 2025 8:30 am
Share
Facebook Share on Facebook
X Share on Twitter
LinkedIn Share on LinkedIn
WhatsApp Share on WhatsApp
Email Share on Email
The City AM market open live blog
Despite an – albeit modest – gain on the FTSE 100, the pound was crumbling under pressure again this morning, dropping to $1.337. This was edging towards yesterday’s one-month low.
The pound had its worst day since President Donald Trump’s tariff offensive on Tuesday as it weakened against the dollar and Euro.
As yields rose, sterling printed its most significant one-day drop since April, when US President Donald Trump’s announcement of country-specific tariffs spooked markets.
Bond traders have hit out at the “chorus” of Westminster voices advocating for higher taxes.
Fixed income managers across the City, who hold and trade gilts, have told City AM that swirling tax rumours and the lack of appetite for spending cuts in the UK are to blame for troubles in the bond markets.
Russel Matthews, a senior portfolio manager at RBC BlueBay Asset Management, said the rise in gilt yields shone a spotlight on market fears that higher taxes would harm growth and worsen inflation, with spending cuts likely to be favoured by City traders.
“The main factor is the perception that the government lacks a credible plan to curb runaway welfare spending.
“Without such measures, market confidence risks eroding. While tax speculation adds noise, the underlying issue is structural—whether the UK can avoid being pulled into a worsening fiscal position.”
Elsewhere, the FTSE 100 looks set to open flat after US markets closed in the red last night. The S&P 500 closed down 0.7 per cent and the Nasdaq closed down 0.8 per cent.
Gold has continued its stellar run, rising above $3,600 per ounce overnight, a new all-time high for the yellow metal.
The pound is trading slightly lower against the dollar at $1.336.
Read more
Autumn Budget in mid-November ‘at the earliest’
The liveblog has ended.
No liveblog updates yet.
Load more
Similarly tagged content:
Sections
Categories
People & Organisations