Jan 14 Reuters The British pound was poised to record a sixth consecutive day of decline against the dollar on Tuesday and hit a fresh 212month low versus the euro as concerns about Britain39;s fiscal sustainability continued to weigh.

Heavy government bond supply has put pressure on British asset prices, while inflation concerns have driven bond yields higher on both sides of the Atlantic.

Investors will closely watch U.S. inflation readings, which could provide further clues on how stubborn U.S. price pressures are. Producer price figures are due later on Tuesday, with consumer prices on Wednesday.

The dollar hovered near its highest level in over two years as traders scaled back wagers on U.S. rate cuts in 2025 after strong economic data.

The British currency dropped 0.2 to 1.2175. It hit 1.2097 on Monday, its lowest level since November 2023.

Yields on 10year gilts dropped one basis point to 4.88 after jumping last week amid worries about the government39;s plans to sell more debt and inflationary pressures in the United States.

UK consumer price figures, due on Wednesday, will also be in the spotlight. Analysts argued that sticky inflation could lead investors to price in less Bank of England BoE rate cuts in a move which could spell more trouble for the UK market.

Higher yields usually reflect a strong economy and attract capital inflows, strengthening the currency. In this case, they may force the government to cut fiscal spending to meet its fiscal rules,…