UK borrowing costs hit levels not seen since before financial crisis

United Kingdom government borrowing costs rose again on Thursday, with the yield on the ten-year gilt closing at 5.378 per cent - a level last sustained before the 2008 financial crisis.

Why are investors selling?

Traders point to three pressures at once: renewed energy-driven inflation across Europe, a heavier-than-expected schedule of gilt issuance, and uncertainty over the tax and spending choices to be set out in the autumn budget. Long-dated gilts have been hit hardest, a pattern that usually signals doubt about the medium-term path of debt rather than about the next rate decision.

What it means for the public finances

Every sustained rise in yields raises the cost of servicing debt, much of which reprices as it is refinanced. Higher servicing costs narrow the room for spending decisions without offsetting tax rises.

What it means for households

Mortgage pricing follows swap rates rather than gilts directly, but the two move together. Lenders have already withdrawn and repriced a number of fixed-rate products this week.

Compiled from Bank of England and Debt Management Office data and from Reuters and Financial Times market reporting. Verification cut-off 22:30 BST on 10 September 2026. Yields quoted are at the London close.