The cost of borrowing in the UK is at its highest level since 2008.

(CLO) On April 29, UK borrowing costs rose to their highest level in 18 years due to concerns about inflation and political instability.

Borrowing costs in the UK have risen to their highest level since the 2008 financial crisis, amid increasing political uncertainty and soaring global oil prices, raising concerns about inflationary pressures and the possibility of further interest rate increases.

At the close of trading on April 28, the yield on 10-year UK government bonds rose by 0.03 percentage points to 5%. This marks the first time since 2008 that the cost of long-term government borrowing has closed above 5%.

The chart shows the fluctuations in the yield of 10-year UK government bonds from before 2010 to early 2026.

This development increases pressure on the UK's public budget, with government debt interest payments projected to reach £111.2 billion in the current financial year, equivalent to approximately 8.3% of total public spending.

Financial markets are also being impacted by political uncertainty surrounding Prime Minister Keir Starmer as he faces increasing pressure related to the Mandelson scandal. Investors fear that if the Labour Party suffers a heavy defeat in the upcoming local elections, Starmer could be replaced by a more left-leaning leader, with a tendency towards increased public spending and borrowing.

Deputy Prime Minister Angela Rayner is currently considered by many bookmakers to be the leading candidate to succeed Mr. Starmer.

Besides political factors, the sharp rise in oil prices has also fueled investor concerns about prolonged inflationary pressures. Brent crude oil prices rose to $112 per barrel on April 28, its highest level in three weeks, amid fears that disruptions to the Strait of Hormuz could affect global energy supplies.

The rise in oil prices has driven up borrowing costs in the US and many eurozone countries, and the market fears that conflict in the Middle East could reignite global inflation.

In the UK, this development comes just ahead of the Bank of England's policy meeting scheduled for April 30, where policymakers will decide whether to keep or raise the base interest rate, currently at 3.75%.

The market currently forecasts that the Bank of England could raise interest rates two more times in 2026, bringing the base rate to 4.25%, with adjustments expected in July and September.

Source: https://congluan.vn/chi-phi-vay-no-cua-anh-cao-nhat-ke-tu-nam-2008-10339954.html