UK Borrowing Costs Stay Highest in the G7 as Sterling Slips
British government borrowing costs remain the dearest in the G7, with the ten-year gilt yield holding near 5.07 per cent, its highest since May, as investors weigh Mr Burnham’s spending pledges against his talk of fiscal “flexibility”. Sterling has slipped to around $1.337. The FTSE 100, by contrast, touched a five-month high near 10,717, buoyed by its heavy weighting in energy and commodity shares as oil climbs.
The premium on UK debt reflects lingering scars from the 2022 mini-Budget, a heavy public-debt load and doubts over how this summer’s cost-of-living giveaways will be funded. Softer inflation and labour-market data have reinforced expectations that the Bank of England will hold Bank Rate at its meeting on 30 July, its so-called “Super Thursday”. But the oil-driven threat to inflation complicates that calculus. Watch the gilt market’s reaction to the Bank’s guidance, and to any further spending commitments before the autumn Budget.