Long-term borrowing costs reach record high

Government long-term borrowing costs have reached a 28-year high.

3 Sep 2026

Government long-term borrowing costs have reached a 28-year high.

The yield on a 30-year gilt increased to 5.89% on 1 September - the highest rate since 1998.

The rate reflects investors' concerns over inflation, borrowing levels and spending levels. Borrowing costs in the US, Europe and Japan have also risen recently.

High borrowing costs will limit the amount of headroom the government has in relation to its own fiscal rules - thereby restricting the amount Chancellor John Healey can spend in the upcoming Autumn Budget.

Chris Beauchamp, Chief Market Analyst at trading platform IG, said: 'Governments around the world are feeling the pressure from bond markets, but the situation is particularly acute for the UK, where Andy Burnham's grand promises about reforming the economy are about to meet the cold reality of high debt levels and rocketing borrowing costs.

'UK taxpayers face the likelihood of paying more for his grand ambitions, while also having to worry about a BoE rate hike that becomes more likely with each $1 on the price of oil.'