UK bond yields surge amid debt and inflation concerns

The yield on the UK 10-year gilt surged above 4.8%, its highest level since August 2008, while the 30-year gilt yield rose to 5.47%, the highest since 1998.

UK bond yields surge amid debt and inflation concerns

This increase is part of a broader rise in bond yields, driven by concerns over Trump's policies and a hawkish stance from the Federal Reserve. The pressure on the UK bond market has been intensified by growing investor worries about the nation's rising debt and the government's ability to manage public finances while executing its budget plans. In late October, the Chancellor of the Exchequer presented a budget that included £142 billion in borrowing and a £74 billion annual spending increase, sparking concerns about fiscal sustainability.

Inflation concerns lower BoE rate cut expectations

Additionally, inflation concerns have weighed on sentiment, with CPI inflation and wage growth trending upward. Traders expect only two quarter-point rate cuts by the Bank of England this year, down from more than three anticipated just a month ago.