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UK Debt Soars: 5-Year Yield Hits 15-Year High
27 Oct
Summary
- Britain sold £4.5 billion of 5-year debt at a 5.036% yield.
- This yield is the highest recorded since 2008.
- Bond yields have surged globally due to inflation and energy price fears.
On Tuesday, Britain sold £4.5 billion of 5-year debt, achieving an average yield of 5.036%. This marks the highest yield for such debt since 2008, intensifying pressure on finance minister John Healey ahead of his upcoming annual budget. Demand for the debt was strong, with investors bidding 3.51 times the volume offered.
Globally, bond yields have seen a significant increase since the start of the US-Iran war. This trend is attributed to investor concerns about rising inflation and increased government debt levels, exacerbated by elevated energy prices. Earlier in October, yields on 20- and 30-year gilt bonds reached their highest since 1998, while 5- and 10-year yields hit their highest levels since 2008.
