The UK's 30-year gilt yield, which is the effective interest rate for the government to borrow money over three decades, has reached a 27-year high.
While some see this as a sign of economic mismanagement, others consider it a pan-European trend and a sign of strong UK growth.
The rise in these yields is significant for sectors like pensions and insurance, which require long-term returns.
The situation is different from the 2022 mini-Budget crisis, as the rise in yields is less rapid and does not directly impact the cost of fixed-rate mortgages.
However, the move is a warning sign that markets are 'scent-ing some blood in the water,' and raises the stakes for the upcoming Budget.
The situation in France, where ministers are warning of an IMF crisis, also contributes to the skittishness of the markets.
The rise in long-term borrowing costs could also be linked to the recent reshuffle in Downing Street, which some see as a sign that the Chancellor's control is weakening.
The article concludes by highlighting that the lack of movement in shorter-term gilts means there is a limited direct impact on UK household finances for now.
While some see this as a sign of economic mismanagement, others consider it a pan-European trend and a sign of strong UK growth.
The rise in these yields is significant for sectors like pensions and insurance, which require long-term returns.
The situation is different from the 2022 mini-Budget crisis, as the rise in yields is less rapid and does not directly impact the cost of fixed-rate mortgages.
However, the move is a warning sign that markets are 'scent-ing some blood in the water,' and raises the stakes for the upcoming Budget.
The situation in France, where ministers are warning of an IMF crisis, also contributes to the skittishness of the markets.
The rise in long-term borrowing costs could also be linked to the recent reshuffle in Downing Street, which some see as a sign that the Chancellor's control is weakening.
The article concludes by highlighting that the lack of movement in shorter-term gilts means there is a limited direct impact on UK household finances for now.
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