Oil Above $107 Triggers Global Bond Sell-Off — SkimNews
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- Oil prices jumped 6% to above $107 a barrel on Thursday after Houthi rebels advanced along Yemen's Red Sea coast, raising fears that Saudi crude exports could be choked off.
- UK 10-year government bond yields surged past 5.37% — the highest cost of borrowing since 2007 — creating fiscal pressure on Chancellor John Healey ahead of his 28 October budget.
- The European Central Bank raised its main interest rate to 2.5%, with President Christine Lagarde warning that Middle East-driven inflation would remain "well above target for an extended period."
- US 10-year yields hit 4.92%, their highest since 2023, while 30-year yields reached levels not seen since 2007; Treasury Secretary Scott Bessent's $6bn debt buyback intervention failed to arrest the sell-off.
- Donald Trump suggested the Iran conflict could continue until "immediately after" November's midterms, claiming oil prices would then "tumble downward," while continuing to publicly demand the Federal Reserve cut rates.
- UK petrol prices have risen 6p per litre since the start of September, according to the RAC, and some banks have already raised mortgage rates in response to inflation expectations.
Why it matters: The bond sell-off means governments are paying more to borrow — UK 10-year yields at their highest since 2007, US 30-year yields at 2007 highs — while the ECB hiked to 2.5% and the Fed is expected to raise rates under new chair Kevin Warsh. UK households already face 6p/litre petrol increases since September and rising mortgage rates ahead of Chancellor Healey's October budget.
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