Jan 8 Reuters Sterling slid for a second day on Wednesday against a generally firmer U.S. dollar, despite British longterm borrowing costs sitting at around their highest since 1998.

Solid U.S. data on Tuesday confirmed investors39; view that U.S. interest rates will stay higher for longer, pushing up Treasury yields and boosting the dollar against most major currencies.

Political risks aside, there is little reason to be bearish on the U.S. dollar even if current levels look a little overdone, said Michael Pfister, FX analyst at Commerzbank.

The pound was last down 1.1 at 1.2342, after sliding 0.34 on Tuesday.

It was also weaker against the euro, which was last up 0.6 at 83.35 pence.

That fall came even as yields on British government bonds, known as gilts, spiked higher, rising more than U.S. Treasury yields on Wednesday.

Britain39;s longterm government borrowing costs are at their highest since 1998, with 30year gilt yields last up 10 basis points bps on the day at 5.34.

The 10year yield rose to its highest since October 2008, last up 10 bps at 4.78.

This is a global move but it39;s being led by the UK, said RBC fixed income strategist Megum Muhic.

Investors expect the Bank of England to cut interest rates by only about half a percentage point this year, with inflation likely to hover above the central bank39;s 2 target.

The way Gilts are trading would suggest that participants are becoming increasingly concerned over the perilous UK fiscal outlook,…