GBP/USD: Pound Plunges on UK Fiscal Sustainability Concerns

GBP/USD has tumbled sharply as investor confidence in UK fiscal sustainability deteriorates, triggering a broad-based sterling selloff. The pound's weakness reflects growing market anxiety about the UK government's fiscal position and debt sustainability, reminiscent of the 2022 mini-budget crisis. Bond yields have surged as investors demand higher premiums for holding UK government debt, further pressuring the currency. The fiscal concerns overshadow any potential support from Bank of England rate expectations, as markets prioritize sovereign risk over monetary policy considerations. Technical indicators suggest GBP/USD could test key support levels around 1.2600-1.2650, with further downside possible if fiscal concerns intensify. Traders should monitor UK government bond yields and any policy responses from the Treasury, as these will likely determine near-term sterling direction. The current environment suggests continued pound vulnerability until concrete fiscal measures restore market confidence.