Andrew Bailey’s remarks to MPs about the rise in the 30-year bond yield will bring some relief to the chancellor
The governor of the Bank of England has cautioned against “exaggerating” the impact of a steep rise in the UK’s long-term borrowing costs, which he said was part of a global trend.
Andrew Bailey told MPs the Treasury had continued to borrow at the same interest rate for most of the year despite a rise in the rate on 30-year bonds to a 27-year high.
Bailey’s intervention will bring some relief to Rachel Reeves, who is under pressure from rising debt financing costs ahead of a budget which on Wednesday she set for 26 November.
The governor said the government’s switch to borrowing over five or 10 years rather than 30 years meant its borrowing costs had remained flat this year, and commentators should not “over-focus” on the figure.
