It means the Government pays almost two percentage points more than the German government.<\/p>\n
Michael Wickens, of Cardiff Business School, said the threat of a higher-borrowing Labour Government is shaking markets.<\/p>\n
\u201cThe higher UK yields since February is mainly due to UK political risk arising from the additional threats to the level of debt in the economy arising from an even more Left-wing and economically illiterate leadership,\u201d he said in response to the survey.<\/p>\n
\u201cArguably, yields before February should also have reflected the risk present since Labour entered government in July 2025. Higher UK inflation due to domestic energy policy has also raised yields.\u201d<\/p>\n
Lukasz Rachel, at University College London, said political events have been important drivers of higher borrowing costs.<\/p>\n
\u201cGilts have moved on specific political news: by-elections, local elections, Burnham,\u201d he said.<\/p>\n
While the US also suffers from political uncertainty, its safe-haven status for global investors appears to protect the market, he added.<\/p>\n
At the same time, weak demand for Britain\u2019s long-term debt, combined with the Bank of England\u2019s decision to sell bonds bought under quantitative easing, also pushed up borrowing costs, the economist said.<\/p>\n
Higher borrowing costs on the nearly \u00a33tn national debt represent another threat to Rachel Reeves\u2019s plans for the public finances.<\/p>\n
In March, on forecasts drawn up before the war in the Middle East had begun, the Office for Budget Responsibility forecast that the Chancellor would spend more than \u00a3109bn on central government debt interest this financial year, rising to more than \u00a3130bn per year at the end of the decade.<\/p>\n","protected":false},"excerpt":{"rendered":"It means the Government pays almost two percentage points more than the German government. Michael Wickens, of Cardiff…\n","protected":false},"author":2,"featured_media":991394,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3090],"tags":[8916,3420,51,1700,807,528,1715,16,10051,15],"class_list":["post-991393","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-andy-burnham","tag-bonds","tag-business","tag-economy","tag-keir-starmer","tag-labour-party","tag-standard","tag-uk","tag-uk-economy","tag-united-kingdom"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116655634927276905","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/991393","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=991393"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/991393\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/991394"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=991393"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=991393"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=991393"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}