UK borrowing costs rise sharply as investors pull out, raising concerns for Chancellor Rachel Reeves

UK borrowing costs have surged above levels seen after the 2022 mini-Budget, raising concerns about economic stability under Chancellor Rachel Reeves. The ten-year gilt yield has reached 4.8%, the highest since the 2008 financial crisis. Investors are withdrawing from Britain, leading to a decline in the pound and fears of capital flight. This situation echoes the turmoil during Liz Truss's tenure, although the rise in borrowing costs has been more gradual under Reeves. Reeves faces pressure to maintain fiscal rules amid rising borrowing costs and a slowing economy. She may need to consider tax increases or spending cuts to avoid breaching her fiscal commitments, complicating her position within the government.