Britain’s 30-year government bond yield climbed to a 28-year high on Wednesday as a renewed global sell-off in government debt pushed borrowing costs higher across major markets.
The yield on 30-year UK gilts rose 13 basis points to 6.036%, its highest level since January 1998. The increase came as investors remained concerned about persistent inflation, heavy government borrowing and rising energy costs.
UK 10-year gilt yields also rose to 5.48%, approaching their highest level since 2007. Higher yields mean the government faces increased costs when raising money through new debt, adding pressure on public finances.
The market move comes three weeks before Finance Minister John Healey presents his first budget on October 28. Concerns over the government’s borrowing plans have increased, with forecasts suggesting the budget could add significantly to public borrowing in the current financial year and beyond.
Oil prices rising above $100 a barrel have added to inflation concerns, strengthening expectations that interest rates may remain higher for longer.
The UK sell-off formed part of a wider move across global bond markets, with US 30-year Treasury yields also reaching their highest level in more than two decades.
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