Government bond prices hit a 25-year high yesterday as UK 30-year yields rose amid tensions in the Middle East and growing concerns about higher oil prices and inflation.
The UK’s 30-year government bond yield, or interest rate, rose to 5.16 percent – its highest level since September 1998 – topping its previous peak of 5.115 percent earlier this month.
The 10-year yield rose to 4.69 percent in August, nearing a 15-year high of 4.755 percent.
Interest rates rise when bond prices fall, indicating the cost of issuing new government bonds.
Unlike a year ago, when UK government bond yields rose significantly more than other countries’ yields following the mini-budget, the recent rise is part of a global trend.
The 10-year US Treasury yield rose above 5 percent last week for the first time since July 2007 after comments from Federal Reserve Chairman Jerome Powell were seen as confirmation that US Treasury yields will remain higher for a long time to keep easing going. under control. Inflation.
“Markets remain volatile and investors are hesitant as rising tensions in the Middle East and bond yields threaten to undermine any thoughts of an immediate recovery,” said Richard Hunter, head of markets at platform Interactive Investor.
The rise came after new data showed the British government’s borrowing in September was lower than expected but still high. The UK borrowed £14.3 billion last month. That was £1.6 billion less than a year earlier, but the sixth-highest September figure since records began in 1993.
Chancellor Jeremy Hunt said interest payments on the national debt last year were twice as high as the previous year. “This is clearly unsustainable; We need to reduce the debt,” he said.
Stock markets around the world fell as they faced another tumultuous weekend over the war between Israel and Gaza. The FTSE 100 index closed 1.3 percent lower, its biggest daily fall in more than two months.
Global oil prices rose, with Brent crude rising to $93.17.
Source: I News
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