Annual UK house price growth halves as mortgage rates rise - business live
UK government borrowing costs have surged as bond yields hit levels not seen since 1998, driven by global market turmoil and inflation fears. The rise in yields is exacerbated by the ongoing Middle East conflict, which is restricting oil supplies and keeping interest rate expectations high.
Why it matters
Rising bond yields increase government borrowing costs, putting significant pressure on national budgets and economic stability.
Another bout of turmoil in the bond markets is driving up government borrowing costs across the world, and the UK is in the firing line.
Bond prices are falling, which pushes up the yield – or rate of return – on the debt.
And just a moment ago, the yield on Britain’s 30-year gilts hit 6% for the first time since 1998.
The yield on shorter-dated UK bonds are also rising, which will drive up London’s borrowing costs and add to the pressure on chancellor John Healey ahead of the budget later this month.
The bond sell-off is being driven by fears of high inflation, as the Middle East conflict continues to restrict oil supplies from the region.
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