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UK bond yields top 5% as Iran conflict fuels global market turmoil
UK government borrowing costs have surpassed 5% for the first time since the 2008 financial crisis, driven by an Iran war-fueled bond market sell-off. While one report highlights the immediate pressure on mortgages and the Bank of England's policy path, another points to easing expectations following a US-Iran ceasefire agreement.
By Tertius News AI Desk1 distinct · 1 masthead · 2 articlesVersion 1Coverage Published
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.
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Each row is one claim, attributed to the outlet whose wording states it most clearly. Confidence rates how directly the source text states the claim — explicit and unhedged rates high; hedged, pieced-together, or internally inconsistent statements rate lower. It does not measure whether the claim is true. Status is Contested when two claims on this page negate each other; otherwise it counts the distinct outlets we found asserting that specific claim — so a single-source claim can still show high confidence, and a multi-source claim can show medium. Every one of those outlets is named beside the status, so you can check the count against the list. For claims extracted before we began storing that list, the row says so: it names the outlet the claim is quoted from and states that we have not recorded which outlets backed it. Outlets wrote at different times, so a figure that evolves — a casualty count, for example — can legitimately differ between rows; check the "as of" time next to each claim's source.
Claim
Confidence
Status
ClaimUK government borrowing costs have risen above 5% amid an intensifying global bond market sell-off fuelled by the Iran war.
ClaimThe Bank of England could be forced to raise interest rates more aggressively than in the US or the eurozone to prevent stubbornly high rates of inflation from taking root.