UK borrowing costs spiked yesterday as Andy Burnham’s by-election victory raised fears of a lurch to the Left that could further weaken Britain’s deteriorating public finances.
Yields on ten-year government bonds, known as gilts, climbed from 4.76 per cent to around 4.85 per cent. Bond yields rise when their prices fall.
Experts fear yields will climb further amid pressure to spend even more money and rewrite budget rules during what could become a chaotic leadership scramble.
It came as latest grim data showed UK borrowing – the gap between tax revenues and government spending – soared to £23.3billion last month, £5.4billion higher than a year earlier and smashing past official forecasts.
It was partly due to a surge in the interest payments on government debt to £11.7billion – the highest on record for May. Spending on public services and benefits also jumped.
