- Britain's long-term borrowing costs have reached their highest level since 1998, driven by escalating inflation concerns and political uncertainty.
- On Tuesday, the yield on 30-year UK government bonds, known as gilts, increased by 0.14 percentage points to 5.798 per cent, marking a 28-year peak.
- This surge in gilt yields indicates a drop in bond prices, leading to higher expenses for the government when borrowing from financial markets.
- The rise is attributed to growing predictions that the conflict in Iran will cause higher energy costs and inflation, prompting the Bank of England to increase interest rates.
- City traders anticipate at least two interest rate hikes from the central bank in the coming months, despite the rate remaining at 3.75 per cent last week.
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