UK 30-Year Bond Yield Hits 5.72%, Highest Since 1998

London – The United Kingdom's bond market is experiencing significant turbulence, with the yield on the 30-year Gilt surging to 5.72% on September 2, 2025. This marks its highest level since 1998, indicating a substantial increase in the cost of long-term government borrowing. The financial observation platform, The Kobeissi Letter, highlighted the severity of the situation, stating in a tweet, "Today, the yield on a 30Y Bond in the UK rose to 5.64%, its highest level since 1998."

The recent spike places current yields at a dramatically elevated position compared to historical lows. According to The Kobeissi Letter, yields are now "15 TIMES higher than they were at the 2020 low, just 5 years ago," reflecting a rapid and steep increase in borrowing costs over a relatively short period. In 2020, the UK 10-year bond yield, for instance, touched a low of 0.37%, underscoring the magnitude of the current rise across the yield curve.

This escalating cost of borrowing intensifies pressure on Chancellor Rachel Reeves ahead of the upcoming Autumn Budget. The government faces the challenge of meeting its fiscal rules, with analysts suggesting the need for significant measures, potentially including tax increases, to stabilize public finances. Concerns among investors about the government's ability to manage its debt have been a key driver of the bond market sell-off.

The current market volatility draws parallels to the financial turmoil experienced in late 2022, following the "mini-budget" that triggered a sharp sell-off in Gilts. While the immediate catalyst differs, both periods underscore the sensitivity of the UK bond market to fiscal policy and investor confidence. The broader global bond market is also experiencing a sell-off, contributing to the upward pressure on UK yields.

Higher bond yields translate directly into increased interest payments for the UK government, impacting the national debt and the overall economic outlook. Analysts note that this environment presents "highly difficult choices" for the Chancellor, as efforts to raise revenue must balance fiscal stability with economic growth. The pound has also reacted to the market jitters, experiencing a decline against major currencies amidst the bond market's struggles.