GBP/USD exchange rate plunges 1.4% as UK fiscal concerns intensify

On Tuesday, the pound's decline intensified as concerns over the UK's public finances continued to rise. At 2 p.m. London time (9 a.m. Eastern Time), the GBP/USD exchange rate fell by 1.4%.

In other markets, European stocks generally moved lower, with tariff uncertainties triggering global market volatility. The UK's FTSE index is currently down 0.4%, Germany's DAX index dropped 0.88%, Italy's FTSE MIB index fell 0.46%, and France's CAC 40 index is roughly flat. The Europe Stoxx 600 index is down 0.6%.

In company news, private market investment firm Partners Group topped the Stoxx 600 index in terms of gains. Due to increased performance fees, the company posted a first-half profit of 578 million Swiss francs ($720 million), exceeding analysts' consensus estimate of 570 million Swiss francs.

At the bottom of the decliners list, Fresenius Medical Care, listed in Frankfurt, saw its share price plunge 5.5%, ranking as the biggest loser among Stoxx 600 constituents. Previously, UBS analysts downgraded the stock to "sell."

The wave of consolidation in the Italian banking sector continues: state-controlled Monte dei Paschi di Siena raised its acquisition offer for domestic peer Mediobanca, adding a cash compensation of €0.90 ($1.05) per share and revising the previous all-stock proposal of exchanging 2.533 shares for 1 Mediobanca share.

The new offer represents an 11.4% premium over Mediobanca's closing price on January 23. Since the beginning of the year, this Italian bank has resisted Monte dei Paschi di Siena's acquisition intentions and rejected the initial all-stock offer on September 8.

However, last month Mediobanca's defensive strategy to acquire Generali Bank failed to gain shareholder support, prompting some analysts to reassess the likelihood of the bank avoiding a takeover.

On Monday, European stocks started the new trading month higher, with the defense and healthcare sectors buoyed by positive corporate news. However, market sentiment shifted overnight, and Asia-Pacific markets were mixed. Investors are weighing trade developments— the U.S. Federal Appeals Court ruled that most of the global tariffs imposed by former President Trump were illegal.

The Federal Circuit Court of Appeals ruled by a vote of 7 to 4 that only Congress has the authority to impose comprehensive tariffs. Trump called the ruling "highly biased" and said he would appeal to the U.S. Supreme Court.

These developments could affect U.S. market sentiment in September. Historically, this month has been the worst-performing for U.S. stocks, with the S&P 500 index averaging a 4.2% decline over the past five years and an average drop of more than 2% over the past decade.

On Tuesday, regional investors will closely watch the release of eurozone inflation data at 10 a.m. London time. Spanish unemployment data will also be released on the same day.