UK borrowing costs soared yesterday amid a global bond market rout sparked by a surge in the oil price back above $100.
Yields on ten-year gilts climbed above 5.1 per cent as the oil price rise, driven by the Iran war, fuelled inflation and interest rate hike fears.
Until the conflict, gilt yields had not been at that level since the financial crisis in 2008.
The rise will add to the cost of servicing the UK’s debt pile, creating a headache for new Prime Minister Andy Burnham and his Chancellor John Healey (pictured).
Burnham is already facing questions about how the Government will balance the books after a series of eye-catching pledges on energy bills, bus fares and business rates.
