On Wednesday, UK stocks and bonds plunged, along with the pound, after the International Monetary Fund (IMF) sharply criticised the massive package of tax cuts announced last week by the new government.

On Wednesday, the Sterling opened in London nearly 1 cent lower than before the IMF’s intervention, trading at $1.0679 by 03:30 ET (07:30 GMT). On the other hand, FTSE 100 opened down 1.9% at a new six-month low.

However, the most menacing move was the bond markets where investors continued to dump Gilts, thereby pushing the cost of the government’s extra borrowing ever higher.

Reportedly, the yield on the benchmark 10-year Gilt surged another 11 basis points to 4.61%, a new 14-year high, while the 5-year Gilt yield surged 12 basis points to 4.81%.

The speed of the jump in bond yields has been breathtaking, wrecking the long-term financing calculations of every major player in the economy from the government to mortgage holders and businesses. The 10-year yield has surged 2.84 percentage points in less than two months, the kind of move unseen in the last five decades.

Meanwhile, European shares fell 1% on the same day, in line with a sell-off in Asian markets, as an intensifying energy crisis in the region and the relentless rise in global bond yields fuelled worries about a recession.