Closing post
Time to wrap up….
UK government borrowing costs have reached their highest level since 2008, while financial markets now expect up to three interest rate rises this year as investors digest the impact of the Iran conflict.
The yield, or interest rate, on 10-year borrowing was pushed to heights not seen since the global financial crisis, as investors dumped UK government bonds.
The market move followed the Bank of England’s decision on Thursday to leave interest rates on hold at 3.75% and hint at a future increase. By Friday, markets were pricing in as many as three interest rate rises in 2026.
Higher gilt yields create a headache for the chancellor, Rachel Reeves, by pushing up the cost of servicing the government’s debt pile.
The 10-year yield has traded above 5% by mid-afternoon – the highest level since the depths of the global financial crisis in mid-2008.
Stock markets fell again too, with Britain’s FTSE 100 closing at its lowest level since late last December.
Household energy bills in Great Britain could increase by more than £330 a year to almost £2,000 from this summer after the Iran war pushed the UK’s gas market past three-year highs.
A typical combined household gas and electricity bill is now forecast to reach £1,972 a year from July under the UK government’s quarterly price cap, according to analysis by the energy consultancy Cornwall Insight,.
The fresh forecast has soared above an estimate from two weeks ago when the consultants predicted, after only five days of war in the Middle East, that the price cap could climb to £1,800 a year from July, up from the £1,641 cap for April to June.
FTSE 100 closes down for the year
After a rough day’s trading, Britain’s FTSE 100 share index has ended the day at its loweest level since 29 December 2025.
The “Footsie” has shed another 1.4% of its value today, and fell by 145 points to close at 9,918 points tonight.
That confirms that the index has lost all its earlier gains in 2026, which had been a strong year for share prices before the Iran war began at the end of February (when the FTSE 100 was over 10,900 points)
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