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UK 30-year gilt yields jump to highest level since 1998 amid debt sell-off
The rise followed an international sell-off of government debt, as energy costs, a weaker yen, and higher US yields raised global borrowing pressures.
UK gilts sold off on Tuesday, pushing 30-year borrowing costs to their highest level since 1998, a move that the Guardian characterizes as part of a broader international sell-off of government debt rather than a UK-only event.
According to the Guardian, several global factors have tightened financial conditions, including the Iran war increasing energy costs, a shift away from expectations for falling inflation and interest rates, and a plunging Japanese yen removing another perceived source of stability.
The outlet also points to US yield pressure, saying the US Treasury secretary, Scott Bessent, has not managed to calm markets with efforts to lower US yields, while it frames the early stage of the AI investment cycle as a phase of issuing large amounts of debt before long-term returns can be clearly assessed.
The Guardian warns that UK political decision-making could matter for investors, noting that six weeks into office Andy Burnham and chancellor John Healey have offered little to change market perceptions, including in relation to a reference to 10-year gilt yields at 5.2% and the risks if that level persists.