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The British government’s borrowing costs rose Thursday with bond yields hitting 15-year peaks on expectations of more central bank interest rate hikes to fight inflation. news online
The yield on five-year bonds rose to 4.95 percent, reaching a level last seen during the global financial crisis in July 2008.
And the yield on 10-year bonds reached a similar pinnacle at 4.69 percent.
Both highs were above levels reached late last year during a period of UK economic turmoil that ended Liz Truss’ short spell as prime minister.
Markets on Thursday ramped up their expectations for further Bank of England rate hikes.
The British central bank is now expected to lift its main lending rate to a peak of 6.5 percent in March, as it seeks to dampen stubbornly high inflation.
Prior expectations had been for a peak of 6.25 percent.
The BoE lifted its interest rate in June for the 13th month in a row to five percent, as it sought to bring down inflation in line with its remit.
UK annual inflation unexpectedly held at 8.7 percent in May, causing the central bank to hike by a larger-than-expected amount.
Separately on Wednesday, the UK government revealed it had sold two-year gilts in an auction at the highest rate since 2007.
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