UK 30-year borrowing costs hit 6%, highest since 1998, as government bond sell-off intensifies – business live
Summary
The cost for the UK government to borrow money has risen sharply, with 30-year bond yields reaching 6%, the highest since 1998. This increase is part of a global trend driven by concerns over high inflation and ongoing conflicts affecting oil supply.Key Facts
- The yield (interest rate) on UK 30-year government bonds hit 6%, a level not seen since 1998.
- Rising bond yields mean higher borrowing costs for the UK government and put pressure on the upcoming budget.
- Bond yields are also increasing in the US and Japan due to inflation concerns and geopolitical tensions.
- US 10-year Treasury bond yields recently reached their highest since 2002 despite slightly lower-than-expected inflation data.
- Investors worry the US Federal Reserve will keep raising interest rates to control inflation.
- The Bank of England official Catherine Mann believes interest rates in the UK should rise to better control inflation.
- Mann argues that current financial market conditions do not tighten the economy enough to reduce inflation.
- Global inflation risks, along with conflicts in the Middle East affecting oil supplies, are fueling the bond market sell-off.
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