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Rising UK gilt yields lift long term borrowing costs
The 10-year gilt yield is at its highest level since 2008 and the 30-year yield since 1998, increasing the price of long term government funding ahead of the Oct. 28 budget.
BBC Business reports that UK government borrowing costs have climbed, with some gilt yields now at their highest levels since 1998 as investors grow more concerned about inflation.
The outlet says yields on gilts have been moving higher, including the 10-year bond at its highest since 2008 and the 30-year bond at its highest since 1998, which means the government pays more to borrow over the long term through the bond interest payments it must make to investors.
With a first budget due on Oct. 28, the report notes the government is constrained by self-imposed fiscal rules, limiting how much it can redirect spending if higher borrowing costs require additional funding.
Analysts cited by BBC Business expect mortgage rates on new fixed deals could rise as lenders face higher funding costs, while the higher yields could be more favorable for people purchasing annuities, an insurance product that provides retirement income for life.