UK Borrowing Costs Hit 28-Year High as Markets Reprice War
Britain’s 30-year borrowing cost jumped to 5.88 per cent — its highest since 1998 — and the 10-year gilt reached levels last seen in 2008, as London’s first session since the US-Iran escalation joined a global bond sell-off. Brent traded above $92; the FTSE fell about half a per cent, cushioned by Shell and BP. Only five ships transited Hormuz on the latest count, and Shein shares slumped 10 per cent on their Hong Kong debut after spurning London.
The bond market is where the Iran war reaches British households, and this morning it spoke plainly: oil above $92 revives inflation just as the Bank might have eased, so gilts sold off harder than shares fell — the escalation priced as a price shock, not a safety event, exactly as Treasuries signalled yesterday. A 30-year yield at 1998 levels compounds the Chancellor’s every Budget option; debt interest already consumes nearly four per cent of national income, and each basis point is spending forgone. The BRC’s shop-price data completes the loop — energy costs are in the food aisles already. Watch the gilt auctions this month and the January price-cap forecasts; both now carry a war premium Westminster cannot legislate away.