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UK Bond Market Sell-Off Triggers 25-Year High in Long-Term Borrowing Costs, Raising Concerns and Shaking Investors

UK Bond Market Sell-Off Triggers 25-Year High in Long-Term Borrowing Costs, Raising Concerns and Shaking Investors

The recent sell-off in global bond markets, triggered by fears of global inflation and US political instability, has resulted in the UK’s long-term borrowing costs reaching their highest level since 1998. This rise in borrowing costs is driven by concerns that central banks will maintain high interest rates through 2024 and possibly into 2025. The increase in US government borrowing and political instability, along with reports of strains within Germany’s ruling coalition, have also contributed to the sell-off. As a result, equity valuations and appetite for risky assets are expected to decline further in the coming weeks.

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