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Newsflash: The UK has paid a record high borrowing cost to sell 30-year government debt this morning, as bond market turbulence puts pressure on the public finances.

The UK has sold £4.25bn of gilts maturing in 2056 at a yield, or interest rate, of 5.8168%, Reuters reports .

This appears to be the highest yield for any gilt sale since the UK’s Debt Management Office was created in 1998.

Significantly, it is above the 5.4047% yield which bonds of this type were sold for in May 2025.

It’s not a massive surprise, as last week’s bond market sell-off pushed up the yield on 30-year UK bonds to the highest since 1998. But such high borrowing costs will eat into the UK’s headroom to keep within its fiscal rules, adding to the challenge facing chancellor John Healey.

The bond sell-off has been caused by several factors, including fears that higher inflation will force central banks to lift interest rates, concerns that some countries are not controlling their spending, and competition from AI companies issuing debt to fund data centre rollouts.