UK long-term borrowing costs hit 28-year high
UK long-term government borrowing costs have reached their highest levels since 1998, driven by global bond market sell-offs. This rise in yields threatens to significantly reduce the budget headroom available to Chancellor John Healey ahead of his October budget.
Why it matters
Increased borrowing costs limit the government's fiscal flexibility, potentially forcing difficult decisions on public spending and taxation.
John Healey will present his first budget on 28 October./Getty Images John Healey will present his first budget on 28 October./Getty Images Gilts UK long-term borrowing costs could halve chancellor’s budget headroom Yield on 30-year gilts highest since 1998 as rout triggered by global factors underlines tricky backdrop John Healey faces
Prefer the Guardian on Google The chancellor’s headroom against Labour’s fiscal rules could be almost halved at his first budget if the current global bond sell-off persists into the autumn, economists say.
The UK’s long-term borrowing costs jumped to their highest level since early 1998 on Tuesday as investors dumped government bonds, betting on higher inflation.
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