UK 10-year borrowing costs hit highest level since 2008

finance
Created 1/8/2025
Updated 1/8/2025

UK 10-year borrowing costs have reached 4.82%, the highest since 2008, amid rising gilt yields and falling confidence in the government’s fiscal outlook. Investors are concerned about heavy borrowing, a stagnant economy, and persistent inflation, with yields threatening Labour's slim budgetary headroom of £9.9bn. Sterling dropped 1.1%, and the FTSE 250 fell 2%, reflecting market unease. Chancellor Rachel Reeves may face tough choices in March, likely curbing spending to adhere to fiscal rules. This echoes the instability of 2022’s "mini" Budget, signaling potential economic turbulence ahead.

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