UK long-term borrowing costs hit highest level in nearly 30 years

Long-term borrowing costs for the U.K. government have reached their highest level in nearly 30 years, with the yield on 30-year gilts at 5.359%. This increase follows a recent auction of £2.25 billion in government bonds. The rise in yields is linked to persistent inflation, which was 2.6% in November, and a contracting economy. Unlike the turmoil caused by the 2022 "mini-budget," current global trends in interest rates and inflation are also influencing U.K. yields. Despite the high yields, the U.K. pound has weakened against the U.S. dollar. This situation reflects broader economic challenges faced by many countries, rather than a unique crisis in the U.K. economy.