Britain’s benchmark borrowing costs have soared to their highest level since the financial crisis, as investors offload government debt amid persistent inflation fears.
The yield on the UK’s 10-year gilt — closely watched as a barometer of future interest payments on public borrowing — reached 4.82 per cent on Wednesday, surpassing the peaks seen in the immediate aftermath of Liz Truss’s 2022 mini-budget.
Yields on the 30-year gilt, which took centre stage during that market turmoil two and a half years ago, climbed to 5.358 per cent on Tuesday — a fresh 27-year high. Bond yields rise as prices fall, underscoring the extent of this latest sell-off.
The pound also weakened, slipping by 1 per cent against the dollar to $1.23 and underperforming many of its peers — a signal that markets remain sceptical about the UK’s fiscal sustainability.
Investors’ enthusiasm for the dollar has continued to build over expectations of corporate tax cuts and regulatory rollbacks under the new US administration. The dollar index, tracking the greenback against six other major currencies, rose by 0.46 per cent on Wednesday and has increased by almost 7 per cent in the past year. Oil prices dipped by more than 1 per cent, bucking the broader inflation trend.
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