UK government borrowing costs hit 5% as Iran war fuels bond market sell-off
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<p>Yields on 10-year debt reach highest since the 2008 financial crisis, raising concerns of faster interest rate rises<br><br></p><p>UK government borrowing costs have risen above 5% amid an intensifying global bond market sell-off fuelled by the <a href="https://www.theguardian.com/world/us-israel-war-on-iran">Iran war</a>.</p><p>The yield – or interest rate – on 10-year debt hit its highest level since the 2008 financial crisis, rising 13
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UK government borrowing costs hit 5% as Iran war fuels bond market sell-off Yields on 10-year debt reach highest since the 2008 financial crisis, raising concerns of faster interest rate rises UK government borrowing costs have risen above 5% amid an intensifying global bond market sell-off fuelled by the Iran war . The yield – or interest rate – on 10-year debt hit its highest level since the 2008 financial crisis, rising 13 basis points to 5.081%, as investors acted on concerns about the economic fallout from the conflict. Borrowing costs also rose for the US and eurozone governments, underscoring growing turbulence in the global financial system after Donald Trump’s extension of a deadline for a peace deal failed to soothe jittery investors. Financial markets worldwide slumped on Friday , extending falls seen since the outbreak of the war, with losses in London and across major US and EU trading hubs. The price of Brent crude remained above $110 a barrel. Kathleen Brooks, the research director for the UK at the financial trading platform XTB, said: “Markets feel more panicky this week, and Friday’s price action suggests that investors are losing faith in Donald Trump’s ability to end this war and reach a deal with the Iranians.” As the US-Israeli war enters its second month, the pressure in markets reflects concern about an inflation shock triggered by the surge in energy prices amid the effective closure of the critical strait of Hormuz . Economists have said that given the reliance of the British economy on global trade and its sensitivity to oil and gas price rises, it could be damaged more than the economies of other industrialised nations by the Middle East conflict. City traders are betting the Bank of England could be forced to raise interest rates more aggressively than in the US or the eurozone to prevent stubbornly high rates of inflation from taking root, despite fears over the strength of the economy and a slowdown in the UK jobs market. Financial mar...
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