The yield on UK 10-year gilts reached 5.21% on September 1, its highest level since the 2008 financial crisis, while 30-year yields climbed to approximately 5.89%, a level not seen since 1998. This surge, which rose from 4.23% earlier in the year, results from a combination of rising oil prices, persistent inflation concerns, and a context of political transition. The government could face around £6 billion in additional annual debt interest payments by fiscal year 2029-30 if these elevated levels persist. Chancellor John Healey must present a budget on October 28 amid intense market pressure to demonstrate the UK’s fiscal credibility.
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