Overview
- Markets sent long‑dated government yields sharply higher on Tuesday, with the US 10‑year near 4.79% and UK 30‑year gilts around 5.89%, levels not seen in decades.
- Investors cited rising oil after renewed US–Iran hostilities, heavier sovereign and corporate bond issuance and stronger expectations for central bank rate hikes as the main drivers of the sell‑off.
- The move is increasing fiscal pressure on governments that must sell large amounts of debt, with the UK’s large gilt programme and July borrowing surprises leaving the Burnham–Healey administration more exposed ahead of its October Budget.
- Officials have taken limited stabilizing steps, including the US Treasury expanding long‑bond buybacks and G20 finance talks, but markets remain sensitive to further geopolitical or supply shocks.
- Higher long yields are already feeding through to mortgage and corporate borrowing costs, which could weigh on household budgets, business investment and equity valuations if the repricing persists.