UK Bond Yields. Who voted for these morons ?22 Jul 2025 13:19
The cost of government borrowing has risen after Treasury borrowing hit a record high last month, cementing the case for Rachel Reeves to raise taxes in the autumn.
UK bond yields – which offer a benchmark for the cost of servicing the national debt – rose after official data showed Britain’s debt interest payments nearly doubled in June.
The interest payable on central government debt jumped from £8.4bn in June last year to £16.4bn last month.
It meant the yield on 10-year gilts edged higher to 4.62pc, even as yields in the likes of France and Germany edged lower.
Nabil Taleb, economist at PwC UK, said: “Higher debt servicing costs as a share of total revenues leave the public finances more exposed to future economic shocks.”
Public sector net borrowing rose by £20.7bn in June, according to the Office for National Statistics (ONS), which was the highest figure for the month on record excluding the pandemic.
It meant the Treasury borrowed £3.5bn more than the £17.1bn that had been forecast for the month by the Office for Budget Responsibility (OBR). Borrowing was £6.6bn higher than the same month last year.
So far this financial year, public sector borrowing hit £57.8bn, which was in line with the OBR forecast.
It comes as economists warned the Chancellor she faces a potential £30bn black hole in the public finances when she comes to deliver her Budget later this year.
Ms Reeves has said repeatedly that she is committed to her fiscal rules and would not reopen departmental spending budgets, leaving her with little option but to raise taxes to keep the nation’s finances in order.
She has faced pressure from backbenchers to impose a wealth tax, while Angela Rayner is pushing for councils to be given new powers to tax tourists.
Darren Jones, the Chief Secretary to the Treasury, said: “We are committed to tough fiscal rules, so we do not borrow for day-to-day spending and get debt down as a share of our economy.”
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