Global bond sell-off pushes UK borrowing costs higher before budget
A worldwide sell-off in government bonds has driven the yield on 10-year UK gilts close to a 19-year high, increasing the upfront cost of public investment and narrowing the chancellor’s room before next month’s budget. The supplied report says international bodies have also warned about wider debt and borrowing risks.
A global sell-off in government bonds has increased pressure on UK borrowing costs ahead of next month’s budget, according to The Guardian. The yield on 10-year UK government bonds, known as gilts, reached 5.38% by mid-morning on Thursday. That level was close to the 19-year high recorded the previous week.
Bond yields represent the effective interest rate governments pay to borrow. Higher yields raise the upfront cost of government investment and leave the chancellor with less room to manoeuvre before the budget. The report does not provide a forecast for future gilt yields or quantify the effect on the government’s overall borrowing bill.
The market movement was part of a wider sell-off in government bonds. International bodies have warned about rising debt and borrowing risks, while Burnham was reported to have stood by a claim that the UK is “in hock” to bond markets. The supplied material does not identify the international organisations involved or provide their full warnings.
It also does not include a detailed response from the government or explain what specific budget decisions could be affected by the rise in borrowing costs.
This independently written report is based on information supplied by the named publisher. Vertrix News has not independently verified the source report.