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UK 10-year bond yields jump to highest since 2008 amid sell-off
The rise in yields, which signals higher borrowing costs, reduces the UK government’s fiscal headroom ahead of the autumn budget.
UK government borrowing costs rose sharply at the start of trading as bond markets continued a sell-off, pushing the yield on 10-year gilts up 4 basis points to 5.268%, the highest level since June 2008, according to the Guardian Business live coverage.
The coverage also said 30-year UK bond yields climbed 5 basis points to almost 5.89%, near highs seen the previous day, with yields rising as bond prices fall.
The Guardian Business linked the move to renewed escalation between the United States and Iran, noting that attacks on Iranian military and tanker targets are raising concerns about further disruption in the Strait of Hormuz and related inflation fears.
The report said the higher yields increase pressure on the UK government, eroding the fiscal headroom available to Chancellor John Healey ahead of the autumn budget.