Источник The Guardian.uk, London, United Kingdom
Заголовок UK long-term borrowing costs at highest since 1998 amid fears over weak growth
Дата 20250107

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UK long-term borrowing costs at highest since 1998 amid fears over weak growth

UK long-term borrowing costs at highest since 1998 amid fears over weak growth

Yield rises above peak reached when Liz Truss’s mini-budget in 2022 caused
turmoil in markets

Richard Partington Economics correspondent

Tue 7 Jan 2025 16.07 GMT Last modified on Tue 7 Jan 2025 16.26 GMT

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The UK government’s long-term borrowing costs have reached the highest level
since 1998 amid investor concerns over Britain’s sluggish growth prospects and
stubbornly high inflation• Экономика » Финансы » Инфляция

• Экономика » Макроэкономика » Макроэкономические индикаторы » Инфляция
.

The yieldin effect the interest rateon UK 30-year government debt rose
by as much as four basis points to 5.22% on Tuesday, above the peak reached
after Liz Truss’s mini-budget in 2022 caused turmoil in financial markets , to
hit the highest level in 27 years.

Long-term borrowing costs have risen across advanced economies amid growing
concern that lingering inflation• Экономика » Финансы » Инфляция

• Экономика » Макроэкономика » Макроэкономические индикаторы » Инфляция
could prevent deeper interest rate cuts by
the world’s most powerful central banks. Investors also fear the US
president• Соединённые Штаты Америки (США) » Политика США » Политики США » Президент США

• Соединённые Штаты Америки (США) » Государственное устройство США » Президент США

• Политика » Политика США » Политики США » Президент США

• Государство » Государственное устройство США » Президент США
-elect Donald Trump• Объект человек » Персоналии по алфавиту » Персоналии на Тр » Трамп, Дональд’s policies could further stoke inflationary
pressures.

Britain’s economy has suffered a sharp slowdown in recent months, leading
investors to warn that weak growth, sticky inflation• Экономика » Финансы » Инфляция

• Экономика » Макроэкономика » Макроэкономические индикаторы » Инфляция
and higher for longer
borrowing costs could force the chancellor, Rachel Reeves, to U-turn on
pledges not to further increase taxes.

“That 30-year gilts are above 5% is headline news on any measure. But do we
think the central bank has lost control of the gilt market at this level? No,”
said Nuwan Goonetilleke, the head of capital markets at the FTSE 100• Экономика » Финансы » Финансовый рынок » Рынок ценных бумаг » Биржи » Биржевые индексы » FTSE 100 insurer
Phoenix Group.

Weve got the narrative that inflation• Экономика » Финансы » Инфляция

• Экономика » Макроэкономика » Макроэкономические индикаторы » Инфляция
has become more persistent. Rate cuts
are still expected, but not as quickly, and you have this point about
government borrowing being higher.”

The rise in long-term borrowing costs came as the Treasury’s Debt Management
Office• Объект организация » Организации по алфавиту » Организации на Ма » Microsoft » Microsoft Office sold £2.25bn of new 30-year bonds at a yield of 5.2% , the highest
level for a 30-year gilt yield since May 1998 when Gordon Brown was the
chancellor. At that time, UK interest rates were cut sharply in response to
the fallout from the Asian currency crisis• Экономика » Экономический кризис and a Russian debt default.

Alongside a delicate economic outlook• Объект организация » Организации по алфавиту » Организации на Ма » Microsoft » Microsoft Office » Microsoft Outlook, investors face the prospect of the
Treasury selling about £300bn of bonds this year to refinance maturing debts
and to cover the government’s budget deficit. The Bank of England is also
selling gilts as it winds down its financial crisis• Финансовый кризис-era quantitative easing
scheme. This reverses its position of recent years, when it had been among the
largest buyers.

“The market is still giving credibility to the government’s plans. However, it
is giving some signs of an amber warning – telling the government to be wary
about how far they stretch some of these plans,” Goonetilleke said.

The Office for Budget Responsibility, the Treasury’s independent economic
forecaster, has predicted government borrowing will be almost £130bn in this
financial year.

Interest rates remaining higher for longer could erase much of Reeves’s £10bn
of headroom she left against her main fiscal rule to get Britain’s national
debt falling as a share of the economy in the fifth year of forecasts.

The chancellor has said she would not raise taxes to meet her rule , insisting
that government spending would instead need tolive within the means that
weve set out” – raising the prospect of spending cuts when she announces her
spring statement on 26 March.

“The margin at five years is pretty wafer thin; it wouldn’t take much of lower
GDP growth, higher gilt yields, or above forecast inflation• Экономика » Финансы » Инфляция

• Экономика » Макроэкономика » Макроэкономические индикаторы » Инфляция
for the government
to miss it,” said Philip Shaw, the chief economist at Investec. skip past
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