UK long-dated borrowing costs spiked to their highest since 1998, pushing the pound lower as investors demanded higher compensation to hold government debt. The move reverberated across global markets.
What Happened
Britain’s 30-year gilt yield rose as high as approximately 5.72% on Tuesday, the highest level since 1998, while sterling weakened more than 1% against the dollar. Analysts said the move was driven by growing concerns about the U.K.’s fiscal outlook and a broader global sell-off in government bonds.
Why Markets Care
Rising long-end yields increase debt-servicing costs and can crowd out investment. In the U.K., investors are watching signals from the autumn budget and the Bank of England’s quantitative tightening programme for clues about future borrowing costs.
Key Numbers Today
30-year gilt yield intraday high: ~5.72% (a 27-year high)
Pound intraday low around $1.336–$1.34
Global Backdrop
Equity markets softened and long-dated European bond yields climbed as investors weighed broader debt-sustainability concerns. The sell-off in gilts mirrored moves across the United States and Europe, where long-term yields also surged.
What’s Next
Market attention now shifts to the government’s fiscal plans and the pace of the Bank of England’s balance-sheet runoff. Execution on tax, spending and growth policies will play a key role in shaping term-premium dynamics through year-end.
Sources
This article is based on reporting from multiple outlets including The Guardian, Reuters, and other market news services.
