Business & Finance

UK long-term borrowing costs reach 28-year high ahead of October Budget

Yields on 30-year gilts reached 5.89% amid a global bond sell-off fueled by inflation and energy market concerns.

Updated Sep 1, 2026 · 12:18 UTC2 reports

The short version

UK government 30-year gilt yields rose to 5.89%, reaching their highest point since early 1998, while 10-year yields hit levels not seen since 2008.
The spike in global borrowing costs is driven by rising oil prices linked to the Iran conflict, tech sector borrowing, and interest rate expectations in the US and Japan.
Higher debt servicing costs threaten to reduce fiscal headroom for Prime Minister Andy Burnham and Chancellor John Healey ahead of the October 28 Budget.
Downing Street reaffirmed its commitment to fiscal rules, while economic observers warn the yield surge will increase government debt interest.

The yield on 30-year UK government gilts rose to 5.89%, marking the highest borrowing rate for that duration since 1998.[The Guardian · BBC News]
Benchmark 10-year gilt yields increased to 5.25%, the highest level since the 2008 global financial crisis.[The Guardian · BBC News]
Oil prices rose 1.7% to $92 following exchanges of fire in the Iran conflict, escalating inflation concerns among investors.[The Guardian]
Finance ministers and central bank leaders from the G20 gathered in North Carolina to discuss global economic conditions.[The Guardian · BBC News]
Japanese 10-year bond yields climbed to their highest level since the 1990s as markets anticipated potential rate hikes by the Bank of Japan.[The Guardian]

It remains uncertain whether sustained yield increases will alter the Office for Budget Responsibility's formal forecasts for the October Budget.[The Guardian]
Specific spending cut policies under consideration by the US administration to manage sovereign debt remain unannounced.[The Guardian]