Trending Now - UK Borrowing Costs Reach Highest Level Since 2008

WHO:

Rachel Reeves, Chancellor of the Exchequer

Nigel Green, CEO of deVere Group

Bank of England (BOE)

WHAT:

U.K. government borrowing costs surged to their highest level since the 2008 financial crisis.

The benchmark 10-year gilt rate crossed 5%.

Yields on the benchmark 10-year gilt jumped around 68 basis points in 15 trading days since the Iran war began.

The yield on the 2-year gilt increased by about 97 basis points.

On March 20th, 2026, the yield on the U.K.'s 10-year government bonds surged around 15 basis points to 5.00%.

Yields on 2-year gilts rose 19 basis points to around 4.602%.

The U.K. had the highest government borrowing costs of any G7 nation before the war.

Long-term 20- and 30-year gilts traded above the 5% threshold.

The BOE's Monetary Policy Committee voted "unanimously" to keep its benchmark interest rate on hold.

Markets are pricing in a near 0% chance of a rate cut from the BOE this year.

The majority of traders expect a key rate of at least 4.25% by the end of 2026, suggesting a minimum of two rate hikes.

WHERE:

United Kingdom

City of London

WHEN:

March 20th, 2026

The conflict in Iran began 15 trading days prior to March 20th, 2026.

WHY:

Rising inflation risks and a growing probability of interest rate hikes due to surging energy costs.

The escalation of the Iran war and the blockade in the Strait of Hormuz led to a surge in oil and gas prices.

HOW:

Investors are scrambling to price in rising inflation risks.

Markets are rapidly unwinding expectations of rate cuts from the BOE.

(UPDATED March 20, 2026 19:17 UTC)

Today, March 20, 2026, the U.K. is facing a significant surge in government borrowing costs, with the benchmark 10-year gilt rate crossing the 5% mark, the highest level since the 2008 financial crisis. This rise comes as yields on the 10-year gilt jumped around 68 basis points over the past 15 trading days, driven by escalating inflation risks and the ongoing conflict in Iran, which has pushed energy prices higher. The Bank of England's Monetary Policy Committee has unanimously decided to keep interest rates on hold, while markets are pricing in a near 0% chance of a rate cut this year, with expectations of at least two rate hikes by the end of 2026.