The pound has dropped to its lowest value against the dollar since November 2023 while government borrowing costs have continued to rise.

The pound fell to $1.21 on Monday morning as the recent sell-off continued.

Meanwhile, the rate at which the government can borrow money – known as the yield – rose again, hitting its highest level since 2008 by one measure.

Borrowing costs for many countries are rising across the world, though some have said decisions made in the Budget have made the UK particularly vulnerable.

Governments generally borrow money by selling bonds to big investors, such as pension funds. UK government bonds are known as gilts.

The yield on the 10-year gilt – the interest rate at which the government pays back a decade-long loan to investors – has risen to 4.86%, its highest level for 17 years.

The 30-year gilt rose to 5.42%, its highest level in 27 years.