The UK government paid its highest borrowing costs since 1998 at a gilt auction on September 8, with 30-year bond yields reaching 5.89 %. The sale of the January 2056 gilt was expected to raise up to £5 billion for the Treasury. UK long-dated gilt yields hit their highest point in nearly three decades amid a global bond sell-off. Rising borrowing costs are driven by persistent inflation, substantial fiscal deficits requiring continued bond issuance, and the Bank of England’s unwinding of quantitative easing. The surge in gilt yields directly impacts debt-servicing costs, corporate borrowing rates, and mortgage affordability across the UK economy.
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