UK 30-Year Bond Yield Surges Above 5% for First Time Since 2002
- It’s a ‘crisis of confidence,’ says TwentyFour Asset’s Shannon
- Market selloff has wiped out billions in bondholder value
The Bank of England in London.
Photographer: Hollie Adams/BloombergThis article is for subscribers only.
The UK government’s long-term borrowing costs soared above 5% for the first time in two decades as investors braced for a flood of bond supply and aggressive rate hikes.
The market suffered another day of meltdown, wiping out a relief rally earlier, as the government vowed to plough ahead with fiscal stimulus that the Bank of England’s chief economist said requires a significant policy response. That led money markets to bet on four percentage points more interest-rate hikes by May, which would take the BOE’s key rate to 6.25%, the highest since 2001.