Lead

UK government borrowing costs have climbed above 5%, reaching their highest level since the 2008 financial crisis, according to a report by The Guardian. The yield on 10-year debt rose 13 basis points to 5.081% amid an intensifying global bond market sell-off fueled by the Iran war. The report noted that borrowing costs also rose for the US and eurozone governments, underscoring growing turbulence in the global financial system.

Coverage comparison

A separate Guardian report indicates a potential easing in market tensions. It states that the US and Iran agreed to a two-week ceasefire, leading to a tumble in oil prices as markets hoped for a return of Middle Eastern supplies to pre-war levels. This development has led City traders to cut their forecasts for UK interest rate rises this year, with markets fully pricing in only one rise by December, bringing the Bank of England's base rate to 4%. Earlier in the week, two rate rises were fully priced in.

Key claims

  • UK government borrowing costs have exceeded 5%, hitting 5.081% on 10-year debt, a level not seen since the 2008 financial crisis, according to The Guardian.
  • The US and Iran have agreed to a two-week ceasefire, and the oil price tumbled on hopes of normalized Middle East supplies, as reported by The Guardian.
  • The average two-year fixed-rate mortgage has risen from 4.83% at the start of March to 5.90% on Wednesday, the highest since July 2024, according to data provider Moneyfacts.
  • The Bank of England may be forced to raise interest rates more aggressively than the US or eurozone to counter persistent inflation, though rate expectations have recently fallen following the ceasefire news.