Analysis: The pound remains vulnerable in the face of potential selling of UK government bonds.

Antonio Ruggiero of Convera stated in a report that amidst the political uncertainty in the UK and geopolitical tensions, there may be more selling of UK government bonds and the pound remains fragile. He said that the leadership challenges that Prime Minister Keir Starmer may face have already been reflected in expectations, and potential challenger Andy Burnham's commitment to fiscal discipline could help prevent further selling of UK government bonds. However, the risk of further selling has not completely dissipated. "In turn, the pound remains fragile, albeit asymmetrically, as geopolitical tensions escalating sporadically often have a similar impact on the euro market." Data from the London Stock Exchange Group shows that the euro rose 0.1% to a one-week high of 0.8662 pounds. The pound remained flat at 1.3445 dollars. Tradeweb data shows that the yield on 10-year UK government bonds fell by 4.8 basis points to 4.823%.