UK 10-Year Yield Tops 5%, Highest Since 2008
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- UK 10-year government bond yields climbed above 5% to their highest level since the 2008 financial crisis, driven by a gilt sell-off that analysts linked to fears over sticky inflation, higher interest rates, and energy bills tied to the US-Israel war with Iran.
- The Office for National Statistics reported UK government borrowing hit £14.3bn in February — the second-highest February on record, £2.2bn above the prior year and well above the £8.8bn economists had forecast.
- UK government debt stood at 93.1% of GDP at the end of February 2026, levels last seen in the early 1960s, with roughly £1 in every £10 of current spending going to debt interest.
- Ruth Gregory of Capital Economics said the government likely has "no scope for a large-scale fiscal support package like that seen in 2022," given its "worse fiscal position," even if the Middle East conflict escalates further.
- Charlie Bean, former deputy governor of the Bank of England, told the BBC the government "doesn't have the room for manoeuvrability" it had in 2022 when it rolled out major energy bill support after Russia's invasion of Ukraine.
- Cornwall Insight projects typical annual household energy bills could rise by £332 in July, though the consultancy said the figure is likely to change.
- Shadow Chancellor Sir Mel Stride accused Labour of "saddling the next generation with the cost of their failure to live within our means," while Chief Secretary to the Treasury James Murray defended the government's "right economic plan."
Why it matters: UK households bracing for a potential £332 jump in annual energy bills in July are unlikely to see the scale of government support rolled out in 2022, because the Treasury's fiscal position has sharply deteriorated: debt at 93.1% of GDP, near-record February borrowing, and gilt yields at an 18-year high above 5% mean the borrowing headroom to cushion an energy shock no longer exists.
