Chancellor John Healey is likely to roll-out "large tax hikes" at this year’s Budget due to a rout in global bond markets, economists warned.

UK borrowing costs have hit their highest level since the financial crisis as gilts were swept up in a mass rout in global bond markets.

An issue for John Healey to deal with when he returns from the divisive summit of G20 economic powers in North Carolina is Britain's high-cost bond yields.