UK hit by fresh sell-off in government bond markets as pound weakens

Yield on 30-year gilts hit highest level since 1998, indicating it will cost UK more to borrow from markets

• Rising bond yields leave Reeves with no choice but to plan a ‘muddle-through’ budget

Rachel Reeves was hit by a fresh sell-off in government bond markets on Tuesday, underlining the formidable challenge facing the chancellor in the run-up to the autumn budget.

The yield, or interest rate, on 30-year UK government debt hit its highest level since 1998, at 5.723%, indicating that it will cost the UK more to borrow from the markets.