Pound drops more than 1% as Bank of England steps into bond market

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Sterling fell more than 1% against the dollar and euro on Wednesday after the Bank of England said it would step in to calm the UK's frenzied bond markets.

The pound was on track for its biggest monthly fall since October 2008, just after Lehman Brothers collapsed.

UK financial markets have cratered in recent days after new Finance Minister Kwasi Kwarteng announced plans to slash taxes and ramp up borrowing. However, the Bank's intervention appeared to calm the market on Wednesday, at least temporarily. The yield on the 30-year benchmark gilt fell by more than 50 basis points at one point.

 

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