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Long-term UK borrowing costs hit their highest level since the late 1990s on Tuesday as investors worried about the threat of rising stagflation.
The yield on the 30-year gilt hit 5.21 per cent, the highest level this century, ahead of an auction of £2.25bn of longer-dated bonds.
The rise pushed the yield past a previous peak reached in October 2023 and also surpassed levels reached during the peak of the market fallout from Liz Truss’ ill-fated “mini” budget in 2022.
Investor concerns over the outlook for the UK come amid a global sell-off in government bonds in recent months, fueled in part by fears that US President-elect Donald Trump’s tariff plans will be inflationary.
But gilt investors have been particularly concerned that a mix of weak growth and continued price pressures will push the UK into a period of stagflation, with the Bank of England constrained from cutting rates to support the economy.
This is a developing story
