"The interest rate on 30-year government bonds, known as the yield, jumped to 5.698%, making it more expensive for the government to borrow money. There are rising expectations that Chancellor Rachel Reeves will increase taxes in the Budget later this year in order to meet her financial rules, as worries grow about the state of the government's finances. On the currency markets, the pound also fell more than 1% against the dollar on Tuesday morning."
"Susannah Streeter, head of money and markets, Hargreaves Lansdown, said the chancellor faced "highly difficult choices" in the Budget and that she had been "dealt a warning" by investors. "They are selling off UK government debt, clearly concerned that the government may be losing its grip on the public finances," she added. In its manifesto, Labour promised not to raise taxes such as income tax, VAT or national insurance on "working people","
UK 30-year gilt yields rose to 5.698%, the highest level since 1998, increasing the government’s cost of borrowing. Investors sold UK government debt amid concerns about public finances, and the pound fell over 1% against the dollar. Expectations rose that Chancellor Rachel Reeves may raise taxes in the autumn Budget to meet fiscal rules. Labour’s manifesto pledged not to raise income tax, VAT or national insurance on working people, prompting speculation about other revenue options. Options under consideration include extending the income tax threshold freeze beyond 2028 and reforming property taxes, with warnings that poorly designed measures could harm growth.
Read at www.bbc.com
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