UK 10-Year Gilt Yield Climbs to 19-Year High as Oil Tops $100
British 10-year gilt yields hit their highest since 2007 as oil above $100 a barrel pushed borrowing costs up worldwide.
British government borrowing costs climbed to multi-year highs on Thursday, with the yield on 10-year gilts touching its highest level in more than 19 years.
The 10-year gilt yield reached 5.295% at 0930 GMT, the loftiest since August 2007, up 2 basis points on the day. Shorter-dated paper moved in tandem: two-year yields rose 2 basis points from Wednesday's close to 4.742%, their highest since November 2023, while five-year yields hit 4.828%, a peak last seen in September 2023.
The move extended a selloff that began on Wednesday, when oil prices rose above $100 a barrel for the first time in six weeks, lifting borrowing costs across global markets.
Susannah Streeter, chief investment strategist at investment provider Wealth Club, attributed the rise largely to international forces. She said elevated energy prices appeared to be the immediate trigger, but pointed to a longer-running structural shift as some of the world's largest institutional investors rotate away from US Treasuries in search of returns in corporate debt.
The Debt Management Office also published the results of an auction of £5 billion ($6.78 billion) of 4.625% May 2030 gilts. The sale attracted £16.2 billion in bids, a robust cover, and cleared at an average yield of 4.786% — the highest for a gilt in that maturity range since October 2023.
The auction followed Tuesday's syndicated sale of benchmark 30-year gilts, which priced at the highest yield since at least 1998.