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30-year UK gilt yield hits 28-year high amid oil-driven bond rout
The 30-year gilt jumped to 5.88%, while Brent rose 1.7% to $92.1 a barrel, stoking inflation fears that push yields higher across markets.
UK long-term borrowing costs surged again as a global bond sell-off intensified alongside rising oil prices. The yield on the 30-year gilt climbed 9 basis points to 5.88%, the highest level since March 1998, according to the Guardian Business.
The move came as Brent crude rose 1.7% to $92.1 a barrel, with US West Texas Intermediate up 1.9% to $87.35 a barrel. The outlet said the inflation expectations tied to higher energy prices are a key driver of investors demanding higher yields on fixed-rate government debt.
The Guardian Business also pointed to broader pressures beyond the UK, noting that government bond yields are rising across the world. It said the UK is still “not off the hook” because investors appear to view the country as riskier than similar peers, reflecting a mix of political risk, low growth, and sticky inflation.
The outlet added that governments are continuing to borrow at a time when inflation expectations are elevated and financing is becoming harder. It cited the UK budget deficit risk of being near 4% of GDP this year, and said the UK will spend about 3.7% of national income just to pay interest on the debt.
Latest closeWTI crude $86.62 ▲3.9%|Brent $88.80 ▼0.6%