UK 30-year gilt yield tops 6% ahead of Budget

The UK’s 30-year government bond yield rose above 6% in early trading on October 1, reaching its highest level since 1998 and increasing borrowing-cost pressure on Chancellor John Healey ahead of the Budget. Reports put the intraday peak between 6.029% and 6.07%; the available accounts do not specify a common measurement time. The move came amid a global sell-off in government bonds. When gilt prices fall, their yields rise, increasing the return investors demand to lend to the government. Higher yields can make new borrowing and refinancing more expensive, potentially leaving the Treasury with less room to fund spending while managing the public finances. The FTSE 100 also fell in early trading, with reported declines ranging from about 1.7% to nearly 2%. The bond-market pressure extended beyond the UK, with reports describing declines in other major government bond and equity markets. The causes of the international sell-off were not established in the available reporting. The rise in yields adds to the challenge facing Healey as he prepares the Budget. An Office for Budget Responsibility estimate published in March put debt-interest payments at £134.7 billion.