Investing.com – The return on United Kingdom (TADAWUL:) Government debt, also known as gilts, reached its highest levels since 1998 on Thursday, while the British pound was weak against the dollar. This comes as investors are expressing concerns about rising levels of government borrowing and a generally poor economy.
The yield on the 30-year gilt hit 5.455% earlier on Thursday, while the yield on the 10-year gilt rose to 4.921%, the highest since 2008, before settling later in the day.
Meanwhile, the pound fell 0.6% to $1.2291 after falling to $1.2239 earlier in the session, marking its lowest point since November 2023, according to FactSet data.
Matthew Ryan, head of market strategy at Ebury, noted that the volatility seen in UK gilts has been intense, with investors expressing particular concern about the outlook for the British economy and the state of public finances. .
The rise in yields began on Tuesday after weak demand at an auction of 30-year gilts. Bond yields rise when prices fall. This weakness in the gilt market is a reflection of a recent rise in bond yields worldwide, particularly among US Treasurys.
Inflation continues in many parts of the world, forcing investors to reassess their positions and unload bonds.
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