#gilt-yields

#gilt-yields

It depends how the bond market reacts. If the bond market reacts very badly the government will have to react if bond yields start to go up too much, he said. Zahn suggested that it would be unsustainable if the yield, or interest rate, on either 10-year or 30-year UK bonds reached 6%. Such high interest rates created a death spiral, he warned, meaning the government would hopefully act before yields rose that high.

UK public sector borrowing dropped to £1.1bn in July, the lowest July borrowing for three years, as stronger tax revenues slowed the increase in public borrowing. The uplift in receipts was largely driven by a better-than-expected economic performance in the first half of the year. Despite this improvement, borrowing for the financial year to date remains £6.7bn higher than the same period last year.