UK long-term borrowing costs hit highest since 2008 ahead of October Budget

The yield on a 30-year gilt rose to its highest level since 1998, reaching 5. 89%. This increase in borrowing costs will reduce the amount of headroom the government has against its self-imposed fiscal rules.

Higher borrowing costs will limit the Chancellor's ability to spend on consumer-friendly measures to ease the cost of living.

The UK market was closed for the bank holiday yesterday due to a bank holiday.

Borrowing costs in the US, Japan and Europe have hit similar highs in recent days.

Global markets reacted in particular after suggestions in the US that its central bank could raise rates.

The yield on the benchmark 10-year gilt rose to its highest rate since June 2008, at the height of the global financial crisis.

Every time bond yields rise, the UK has to pay more on the debt interest, she says. The Chancellor is in the USA attending a meeting of global finance ministers and central bankers. He told the G20 that the UK had the fastest growth in the G7 in 2026 so far, that productivity was improving and that the UK was cutting its borrowing at the fastest rate of the major economies.

Kathleen Brooks, research director at investment company XTB, told the BBC News Channel: "Of course, this is red lights flashing. We are used to pockets of volatility, it has been volatile few months. " But record levels of government debt and a record tax take mean "these are not comfortable times for the new government and the new chancellor," she says.

AI could cause global economic downturn, Andrew Bailey warns G20

EXISTING ARTICLE