UK long-term borrowing costs rose sharply as 30-year gilt yields reached 5.723%, the highest since 1998, signalling higher market borrowing costs. Yields rose alongside global moves amid fears about erratic US policies, with similar increases reported in Germany, the US and France. The government already spends more than 100bn a year in interest on its debts, heightening budgetary constraints from rising yields. The 10-year gilt yield also climbed to its highest level since January. The pound weakened more than 1.5 cents to $1.3390. Market jitters followed a No10 personnel shakeup including Darren Jones's move and Minouche Shafik's appointment.
The yield, or interest rate, on 30-year UK government debt hit its highest level since 1998, at 5.723%, indicating that it will cost the UK more to borrow from the markets. Yields, which rise when a bond's price falls, are a measure of the interest rate that investors demand when lending to a government or company. Rise in government bond yields The rising yield on long-dated gilts, as UK government bonds are known, echoed a global shift
But with the government already spending more than 100bn a year in interest on the UK's debts, the latest jump highlighted the extent to which the government feels constrained by the bond markets. The 10-year gilt yield, which the independent Office for Budget Responsibility (OBR) uses to forecast future government borrowing costs, also rose on Tuesday, hitting its highest level since January.
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