Borrowing costs soar as oil price spike sparks fears of UK inflation shock and higher
UK government borrowing costs jumped yesterday as the rising price of oil fuelled fears of an inflation shock and higher interest rates.
The ten-year gilt yield hit 5 per cent for the first time since late March, while the 30-year yield rose above 5.7 per cent – its highest since September last year.
Although the Bank of England is expected to hold interest rates at 3.75 per cent tomorrow despite the inflation threat, investors are ramping up bets on a hike to 4 per cent this summer and 4.25 per cent or 4.5 per cent by the end of the year.
Borrowing costs: The ten-year gilt yield hit 5pc for the first time since late March, while the 30-year yield rose above 5.7% – its highest since September last year
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