U.K. Government Bond Yields Could Remain High Due to Energy Costs
Dow Jones
Yesterday
1115 GMT - Yields on U.K. sovereign bonds, also referred to as gilts, could stay elevated given high energy costs due to Middle East tensions, Aberdeen Investments' Matthew Amis says in a note. Ten-year gilt yields hit a 19-year high of 5.294% on Wednesday while 30-year yields increase to 5.921%, their highest since 1998, LSEG data show. High government borrowing costs will weigh on public finances, Amis says. "With gilt yields at these levels, the fiscal room for manoeuvre going into October's budget is incredibly limited." The U.K. budget is due on Oct. 28.
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