The yield on UK 10-year government bonds jumped 4 basis points to 5.268% at the start of trading, marking the highest level since June 2008, according to Reuters. The move came as part of a broader global bond sell-off that accelerated overnight.
Tensions between the United States and Iran have intensified investor concerns about disruption to oil supplies through the Strait of Hormuz. Oil prices extended to a six-week high, with analysts citing inflation worries as a driver of the sharp rise in global bond yields across markets.
The bond market turbulence is pressuring governments worldwide, though the impact is particularly acute in the UK, where a new government faces elevated levels of existing debt. The higher borrowing costs will increase the expense of servicing that debt.
