UK long-term borrowing costs hit highest since 2008 ahead of October Budget
UK government borrowing costs have reached their highest levels since 2008, complicating Prime Minister Andy Burnham's upcoming budget. The rise is attributed to global inflation concerns, geopolitical instability, and high state borrowing levels.
Why it matters
Rising borrowing costs limit a government's fiscal flexibility, potentially forcing cuts to public spending or impacting cost-of-living support measures.
Image source, Getty Images By Faisal Islam , Economics editor and Emer Moreau , Business reporter Published 1 September 2026, 12:59 BST Updated 4 minutes ago Long-term government borrowing costs have risen to a 28-year high, putting further pressure on Prime Minister Andy Burnham ahead of his first Budget next month.
The yield on a 30-year gilt — a loan to the British government — rose to 5.89%, the highest since 1998.
The effective cost of borrowing for governments across the globe has continued to rise this morning with new multi-decade highs in market interest rates.
The moves reflect concerns about inflation arising from the ongoing Iran war, competition from major tech firms for long-term borrowing, and concerns about state borrowing levels.
Follow live: Burnham to address MPs for first time as PM
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