UK 30-year gilt yields hit 28-year high in global selloff
TLT•British 30-year gilt yields rose 13 basis points to a peak of 6.036%, their highest since January 1998, as a global bond selloff pushed U.S. borrowing costs to their highest since 2002.
1. Gilt yields climb
Thirty-year gilt yields reached 6.036% on Wednesday, surpassing a previous record set on October 1. Twenty-year yields were close to a similar record, while 10-year gilt yields rose 10 basis points to 5.48%, just short of their highest since 2007.
2. Budget pressures
The move came a day after finance minister John Healey met economists employed by primary dealers ahead of his first budget on October 28. The finance ministry said Healey reaffirmed the government’s commitment to fiscal rules. Bank of America economists forecast the budget would increase public borrowing by £15 billion in both the current financial year and 2027/28.
3. Global bond selloff
Inflation and high government borrowing remained concerns for bond investors, while oil prices rose further above $100 a barrel. Thirty-year U.S. Treasury yields rose 7 basis points, compared with a 10-basis-point rise in 10-year gilt yields.
