economy
UK government borrowing costs hit their highest level since 2008 as inflation fears hit the gilt market
Three charts show the extent of the U.K. government's borrowing woes.
TL;DR
- UK government borrowing costs, specifically the 10-year gilt yield, reached their highest level since the 2008 financial crisis, crossing 5%.
- The escalating Iran war has led to a surge in oil and gas prices, contributing to inflation fears in the UK.
- Markets have shifted expectations from potential Bank of England rate cuts to anticipating rate hikes later this year.
- The Bank of England noted that inflation would be higher in the near term due to the new economic shock.
- Official figures showed higher-than-expected government borrowing in February.
- Volatility is expected to remain elevated as energy markets influence the inflation outlook.