Closing summary
The UK’s long-term borrowing costs have risen to the highest level since 1998. The yield, or interest rate, on 30-year gilts, as UK government bonds are known, climbed by four basis points to 5.22% after a bond auction.
The rise in borrowing costs has piled pressure on the chancellor, Rachel Reeves, to keep the market on side ahead of a raft of bond sales.
The government plans to sell £297bn of bonds this fiscal year — the second-highest on record. This is keeping gilts under pressure, as investors worry about the outlook for the nation’s ballooning debt.
The UK’s Debt Management Office sold £2.25bn of 30-year bonds today paying a yield of 5.198%. The bid-to-cover ratio was 2.75, the lowest demand since December 2023. However, the difference between the average and lowest yield accepted was just 0.3 basis points, indicating robust appetite for the notes.
There is another auction tomorrow, of £4.25bn of new five-year bonds.
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Thank you for reading. Take care – JK
Wall Street has opened higher at the start of trading:
S&P 500 is up 0.4% at 5,999 points
Dow is up 0.39% at 42,875 points
Nasdaq is up 0.36% at 19,936 points
Updated
