Global Bond Yields Surge to Multiyear Highs, Raising Economic Concerns

A combination of inflation fears, fiscal policies, and global market trends is driving bond yields higher, impacting borrowing costs and financial markets worldwide.

UK government borrowing costs have risen sharply, with 10-year gilt yields reaching 4.9%, their highest level since 2008, and 30-year yields hitting 5.4%.
Experts attribute the rise in yields to global factors, including U.S. fiscal policies under President-elect Donald Trump, which are expected to fuel inflation and increase deficit spending.
Domestically, the UK's increased gilt issuance, persistent inflation, and reduced expectations for Bank of England rate cuts are contributing to rising borrowing costs.
Higher bond yields are pressuring equity markets, raising corporate borrowing costs, and potentially slowing economic growth by increasing mortgage and credit rates.
Economists suggest fiscal discipline, economic growth, or spending cuts as potential measures to stabilize yields, though global trends may limit the effectiveness of such actions.