economy
UK borrowing costs surge to highest since 1998 as bond market braces for election fallout
Government borrowing costs soared on Tuesday, amid reports of a plot among lawmakers to oust the prime minister.
TL;DR
- U.K. government borrowing costs for long-term debt are at their highest in nearly 30 years.
- Yields on 10-year gilts reached their highest level since 2008, and 30-year gilts hit their highest since 1998.
- The bond market is reacting to anticipated heavy losses for the Labour party in local elections.
- There are reports of Labour lawmakers planning to demand Keir Starmer's resignation or a timeline for his departure.
- Investors are concerned about leadership strength, fiscal discipline, and the potential for looser fiscal policy.
- Past market instability, such as the Liz Truss 'mini budget', is influencing current investor sentiment.