UK long-term borrowing costs hit highest level since the 1990s

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Britain’s long-term borrowing costs hit their highest level since the late 1990s on Tuesday as investors worried about the risk of stagflation.

The yield on 30-year gilts rose to 5.21 percent, the highest level this century, ahead of an auction of 2.25 billion pounds worth of longer-dated bonds.

The rise pushed the yield past the previous peak hit in October 2023, and also surpassed the level reached at the height of the market’s fall from Liz Truss’ ill-fated “mini” budget in 2022.

Investor concerns about the U.K.’s outlook have come amid a global selloff in government bonds in recent months, driven in part by fears that U.S. President-elect Donald Trump’s tariff plans will be inflationary.

But gilt investors are particularly worried that a mix of weak growth and sustained price pressures will push the UK into a period of stagflation, with the Bank of England constrained from cutting interest rates to support the economy.

This is a developing story