The yield on 30-year UK government bonds has risen above 6%, its highest level since 1998, amid a global bond sell-off. The yield on 10-year bonds, known as gilts, has climbed to around 5.49%.
Higher yields mean the government pays more to borrow, potentially leaving less money for public services. Debt interest payments are already on course to exceed £100 billion this year, while the national debt is close to £3 trillion.
The rise could complicate Chancellor John Healey’s plans ahead of the 28 October Budget, increasing the risk of tax rises or spending cuts. Investors have been concerned about inflation, slower growth and possible interest rate increases during the wider bond sell-off.
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