The pound is on the slide again, as Rachel Reeves, the UK chancellor, returns to her desk after her trip to China. The dollar has jumped to the highest level in more than two years against a basket of major currencies, to peak at 108.98, extending last week’s rally, after a strong US jobs market report underscored the strength of the world’s largest economy. Sterling fell more than 0.5% to $1.2128 against the dollar, the lowest in 14 months while the euro is at its weakest since November 2022 at $1.0275. The pound had a rough ride last week, as UK government bonds, known as gilts, sold off, pushing their yields higher, reflecting investors’ concerns about the UK’s public finances. Bond yields rose sharply for governments worldwide, before falling back on Friday, after the last jobs report of the Biden administration showed the US labour market grew strongly in December. This morning, US and German yields are edging higher again. UK officials will be monitoring closely moves in the price of government bonds after last week’s turmoil in global markets, when the yield – effectively the interest rate – on the 30-year bond hit its highest level since 1998. Expectations for Federal Reserve rate cuts have receded sharply, but also for UK rate cuts. Markets are awaiting US data on inflation on Wednesday. If the bond selloff is sustained, it could force the chancellor to make adjustments to her tax and spending plans or risk breaking her fiscal rules. GSK, the UK’s second-biggest pharmaceutical firm, has struck a deal to buy Boston-based firm IDRx, which is developing a treatment for a rare type of gastrointestinal tumours. GSK is paying up to $1.15bn under the terms of the deal, which will strengthen its oncology portfolio. Chief executive Emma Walmsley has been making targeted acquisitions to boost key areas after slimming down the overall drugs portfolio in recent years. The agenda • 2.15pm GMT: Bank of England holds QT auction of short-dated debt We'll be tracking all the main events throughout the day …
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