The yield on a 30-year UK government bond hit 5.115 at one stage on Wednesday morning, which is the highest level since September 1998.
UK government bond yields have jumped to their highest level since 1998 amid a global bond rout sparked by worries that interest rates will have to stay higher for longer.
The bond sell-off comes at a critical time for Chancellor Jeremy Hunt, as rising yields push up government borrowing costs and may leave him with even less wiggle room ahead of his autumn statement in November. A higher rate of interest on gilts means the Chancellor will have to put aside more cash to meet interest payments to the owners of bonds.
Neil Wilson, chief market analyst at Markets.com, said while the US jobs data was the catalyst for the latest rout, “it’s also majorly about deficits and about structurally higher inflation, rates and spending in the West”.
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