What rising government debt costs mean for your finances
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High government borrowing costs come amid fears that inflation is creeping up again, which could lead the Bank of England to keep rates on hold.
By Howard Mustoe
The UK government’s borrowing costs continue to rise, hitting the highest level since the financial crisis.
Ten-year bonds hit yields of 4.89% today, the highest since 2008 when they topped 5%.
Bond yields rise when investors in government bonds, also called gilts, sell them and their prices fall. This has been happening as investors worry about Britain’s finances or decide to park their money elsewhere. It also comes amid worries over rising inflation.
Lindsay James, investment strategist at Quilter Investors said that part of the rise is down to rising debt costs around the world. US 10-year government bonds are also on the rise, offering investors 4.68%.
And she said another factor is the ‘sheer size’ of the bond sales by the UK recently.
What does this mean for mortgages?
High government borrowing costs come amid fears ...
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