Pound falls sharply and government gilt interest rates up after major budget tax rises
The pound has fallen sharply after the chancellor announced the biggest tax rises in a generation.
Over the last three days, sterling has dropped by 1.2% (in trade weighted terms) – the biggest fall in 18 months.
Between around 1.30pm and 5.30pm today, versus the dollar, it dropped from about 129.9c to the pound to about 128.6c. In the same period, against the euro, it went from 119.3c to the pound to about 118.4c.
In addition, yields for 10-year UK bonds – the cost or interest rate charged for long-term government borrowing – have gone past 4.5% for the first time in a year.
Ed Conway, Sky News’s economics and data editor, said those yields are “pretty much halfway towards the danger zone” – a zone identified by the Office for Budget Responsibility (OBR).
However, he said other European bonds had risen, too. “But the UK does seem to be moving faster than most of the others,” he added.
While cautioning that the budget is still very new, Conway said the “upshot” is that Rachel Reeves’s “room for manoeuvre” is already diminishing “because of market moves”.
Markets are reacting in “quite a violent way”, Conway said.
“It’s really unusual to see this after a budget, and that will have a bearing on how much this government will be able to afford in the future,” he added.
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‘Raising taxes was not an easy decision’
A sudden rise in the yields of 10-year UK bonds followed Liz Truss’s disastrous “mini-budget” of September 2022, which led to a surge in the cost of borrowing for ordinary consumers, while the pound slumped to a 37-year low against the dollar.
It is “certainly not like that at the moment”, Conway said.
Nonetheless, market movements will be “enough to really concern people at the Treasury”, he added, “because it suggests that a lot of traders are looking at how much money this government is borrowing, and they’re saying: ‘Hang on, maybe we’re going to charge you more’.”
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The pound has weakened and gilt yields – the cost of borrowing by the UK government – has increased in response to the budget, which saw Rachel Reeves introduce the biggest tax hike in a generation.
While Conway said it does not feel like a “crisis point”, he said the “calculus for this government” may be changing.
Jack Meaning, UK chief economist at Barclays, said market reaction was “materially different” to what happened in 2022.
Bond yields since Ms Reeves’s budget are up by about 0.3%, while in 2022 the rise was about 1.5%, he said.
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Reeves acting like ‘compulsive liar’
The conversation Barclays is having with its customers is also different to that in 2022, Mr Meaning added.
At that time, people were wondering whether a “big crisis point” had been reached.
This time, he said the focus is on comments from the OBR about a potential rise in inflation, and the potential knock-on effect as the Bank of England makes decisions on interest rates in the next few months.
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The prime minister’s official spokesperson refused to talk about bond prices.
“We don’t comment on market movements,” they said.
“The chancellor has been very clear that first and foremost, this budget has been about restoring fiscal stability, and she’s outlined two new robust fiscal rules, which put public finances on a sustainable path.”
Solana decentralized finance (DeFi) protocol Loopscale has temporarily halted its lending markets after suffering an approximately $5.8 million exploit.
On April 26, a hacker siphoned approximately 5.7 million USDC (USDC) and 1200 Solana (SOL) from the lending protocol after taking out a “series of undercollateralized loans”, Loopscale co-founder Mary Gooneratne said in an X post.
The exploit only impacted Loopscale’s USDC and SOL vaults and the losses represent around 12% of Loopscale’s total value locked (TVL), Gooneratne added.
Loopscale is “working to resume repayment functionality as soon as possible to mitigate unforeseen liquidations,” its said in an X post.
“Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne said.
In the first quarter of 2025, hackers stole more than $1.6 billion worth of crypto from exchanges and on-chain smart contracts, blockchain security firm PeckShield said in an April report.
More than 90% of those losses are attributable to a $1.5 billion attack on ByBit, a centralized cryptocurrency exchange, by North Korean hacking outfit Lazarus Group.
Related: Crypto hacks top $1.6B in Q1 2025 — PeckShield
Unique DeFi lending model
Launched on April 10 after a six-month closed beta, Loopscale is a DeFi lending protocol designed to enhance capital efficiency by directly matching lenders and borrowers.
It also supports specialized lending markets, such as “structured credit, receivables financing, and undercollateralized lending,” Loopscale said in an April announcement shared with Cointelegraph.
Loopscale’s order book model distinguishes it from DeFi lending peers such as Aave that aggregate cryptocurrency deposits into liquidity pools.
Loopscale’s main USDC and SOL vaults yield APRs exceeding 5% and 10%, respectively. It also supports lending markets for tokens such as JitoSOL and BONK (BONK) and looping strategies for upwards of 40 different token pairs.
The DeFi protocol has approximately $40 million in TVL and has attracted upwards of 7,000 lenders, according to researcher OurNetwork.
Magazine: Ripple says SEC lawsuit ‘over,’ Trump at DAS, and more: Hodler’s Digest, March 16 – 22
United States Senator Jon Ossoff expressed support for impeaching President Donald Trump during an April 25 town hall, citing the President’s plan to host a private dinner for top Official Trump memecoin holders.
“I mean, I saw just 48 hours ago, he is granting audiences to people who buy his meme coin,” said Ossoff, a Democrat, according to a report by NBC News.
“When the sitting president of the United States is selling access for what are effectively payments directly to him. There is no question that that rises to the level of an impeachable offense.”
Senator Ossoff said he “strongly” supports impeachment proceedings during a town hall in the state of Georgia, where he is running for reelection to the Senate.
The Senator added that an impeachment is unlikely unless the Democratic Party gains control of Congress during the US midterm elections in 2026. Trump’s own Republican Party currently has a majority in both the House of Representatives and the Senate.
Related: US lawmaker says TRUMP coin could risk national security
Conflicts of interest
On April 23, the Official Trump (TRUMP) memecoin’s website announced plans for Trump to host an exclusive dinner at his Washington, DC golf club with the top 220 TRUMP holders.
The website subsequently posted a leaderboard tracking top TRUMP wallets and a link to register for the event. The TRUMP token’s price has gained more than 50% since the announcement, according to data from CoinMarketCap.
The specific guest list is unclear, but the memecoin’s website states that applicants must pass a background check, “can not be from a [Know Your Customer] watchlist country,” and cannot bring any additional guests.
On April 25, the team behind TRUMP denied social media rumors that TRUMP holders need at least $300,000 to participate in an upcoming dinner with the president.
“People have been incorrectly quoting #220 on the block explorer as the cutoff. That’s wrong because it includes things like locked tokens, exchanges, market makers, and those who are not participating. Instead, you should only be going off the leaderboard,” they wrote.
Legal experts told Cointelegraph that Trump’s cryptocurrency ventures, including the TRUMP memecoin and Trump-affiliated decentralized finance (DeFi) protocol World Liberty Financial, raise significant concerns about potential conflicts of interest.
“Within just a couple of days of him taking office, he’s signed a number of executive orders that are significantly going to affect the way that our crypto and digital assets industry works,” Charlyn Ho of law firm Rikka told Cointelegraph in February.
“So if he has a personal pecuniary benefit arising from his own policies, that’s a conflict of interest.”
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
Crypto investor sentiment has seen a significant recovery from global tariff concerns, but analysts warn that the market’s structural weaknesses may still result in downside momentum during periods of weekend illiquidity.
Risk appetite appeared to return among crypto investors this week after US President Donald Trump adopted a softer tone, saying that import tariffs on Chinese goods may “come down substantially.”
However, the improved investor sentiment “does not guarantee that Bitcoin will avoid volatility over the weekend,” analysts from Bitfinex exchange told Cointelegraph:
“Sentiment improvements reduce fragility, but they do not eliminate structural risks like thin weekend liquidity.”
“Historically, weekends remain vulnerable to sharp moves — especially when open interest is high and market depth is low,” the analysts said, adding that unexpected macroeconomic news can still increase volatility during low liquidity periods.
Related: Trump fought the bond market, the bond market won: Saifedean Ammous
Bitcoin (BTC) staged a near 11% recovery during the past week, but its rally has previously been limited by Sunday liquidity dynamics.
Bitcoin fell below $75,000 on Sunday, April 6, despite initially decoupling from the US stock market’s $3.5 trillion drop on April 4 after US Federal Reserve Chair Jerome Powell warned that Trump’s tariffs may affect the economy and raise inflation.
The correction was exacerbated by the lack of weekend liquidity and the fact that Bitcoin was the only large liquid asset available for de-risking, industry watchers told Cointelegraph.
Related: US banks are ‘free to begin supporting Bitcoin’ — Michael Saylor
“While improved sentiment creates a more stable foundation, cryptocurrency markets are still susceptible to rapid movements during periods of reduced trading volume,” according to Marcin Kazmierczak, co-founder and chief operating officer of RedStone blockchain oracle firm.
“The sentiment recovery provides some cushioning, but traders should remain cautious as weekend liquidity constraints can still amplify price movements regardless of the current market mood,” he told Cointelegraph.
Crypto investors may have “maxed out on tariff-related fears”
Cryptocurrency markets may have priced in the full extent of tariff-related concerns, according to Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.
“It feels like we’ve maxed out on tariff-related fear,” she told Cointelegraph, adding:
“While many remain uncertain about where things are headed over the next month or so, it also seems like markets were just waiting for the slightest signal that we’re back in the game.”
“Whether the rally is sustainable depends on whether we can break through previous resistance levels, at least in isolation. It could have legs, as markets now seem to believe there’s a ‘Trump put’ under equities, the US dollar and US Treasurys,” Barthere added, warning of more potential volatility amid the upcoming negotiations.
Nansen previously predicted a 70% chance that crypto markets will bottom and start a recovery by June, but highlighted that the timing will depend on the outcome of tariff negotiations.
The tariff negotiations may only be “posturing” for the US to reach a trade agreement with China, which may be the “big prize” for Trump’s administration, according to Raoul Pal, founder and CEO of Global Macro Investor.
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