Surge in UK borrowing costs is not a repeat of the ‘mini-budget’ crisis, economists say
2024-11-01 08:15:34 source：CNBC
November 1, 2024
LONDON — U.K. borrowing costs posted two days of gains right after the Labour government unveiled a huge package of borrowing and tax rises in its Wednesday budget — but analysts downplayed the possibility of a second “mini-budget” crisis in the British bond market.
The 10-year gilt yield, representing medium-term borrowing costs for the government, was slightly lower on the day at 11:20 a.m. London time. It still reached 4.431%, up from around 4.3% ahead of Wednesday’s budget. The 2-year gilt yield had risen from around 4.2% on Wednesday to 4.415% in the Friday session.
Yields move inversely to prices, so higher yields represent a sell-off in bonds — and an aversion to funding U.K. debt.
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