"The yield on benchmark 10-year UK government bonds, known as gilts, briefly rose above 5 per cent on Friday, marking the first time it has crossed that threshold in 18 years."
"The surge in borrowing costs has been driven in large part by extreme volatility in energy markets. The price of Brent crude has climbed to nearly $110 a barrel, having spiked as high as $119 earlier in the week."
"Higher energy costs are feeding directly into expectations of persistent inflation, prompting markets to reassess the likely path of interest rates."
"Traders now believe the Bank of England may be forced to raise rates by as much as one percentage point this year, a dramatic reversal from earlier expectations of rate cuts."
UK government borrowing costs have reached their highest levels since the global financial crisis, driven by rising energy prices and inflation concerns. The yield on 10-year gilts surpassed 5 percent for the first time in 18 years, reflecting a sell-off in sovereign debt. The pound weakened to around $1.33, and the FTSE 100 fell significantly. Energy market volatility, particularly in Brent crude prices, has heightened inflation expectations, leading traders to anticipate potential interest rate hikes from the Bank of England.
Read at Business Matters
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