Investing.com — The return on United Kingdom (TADAWUL:) Government debt, also known as government bonds, reached its highest level since 1998 on Thursday, while the British pound weakened against the dollar. This is because investors are expressing concerns about escalating government borrowing and a generally underperforming economy.
Yields on the 30-year government bond reached 5.455% earlier on Thursday, and the yield on the 10-year government bond rose to 4.921%, the highest level since 2008, before stabilizing later in the day.
Meanwhile, the pound fell 0.6% to $1.2291 after falling to $1.2239 earlier in the session, marking the lowest since November 2023, FactSet data showed.
Matthew Ryan, head of market strategy at Ebury, noted that swings in UK government bonds were intense, with investors particularly concerned about the prospects for the UK economy and the state of public finances.
The rise in yields started on Tuesday after weak demand at an auction of 30-year government bonds. Bond yields rise when prices fall. This weakness in the government bond market reflects a recent increase in bond yields worldwide, especially among US government bonds.
Inflation continues to persist in many parts of the world, forcing investors to reassess their positions and sell off bonds.
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