UK government borrowing costs have surged, with the yield on 10-year gilts—government bonds—surpassing 4%, widening the gap between UK and US borrowing costs to 0.18 percentage points, its highest in nearly a year. Investors are concerned that persistent domestic inflation and a resilient economy will keep UK interest rates higher for longer, unlike the US and Eurozone, where more significant rate cuts are anticipated. Heavy government borrowing and concerns over public finances are also pressuring gilt yields, making UK debt less attractive compared to its US and European counterparts.