UK borrowing costs hit highest since 1998, pound slides on fiscal worries
Britain's 30-year borrowing costs rose to their highest levels since 1998 and sterling slid over 1.5% on Tuesday, highlighting growing investor anxiety about the UK's ability to keep its finances under control.
The selloff in British bonds, known as gilts, coincided with selling across other major bond markets, where the focus is firmly on rising debt levels.
But weakness in sterling pointed to vulnerability in UK markets at a time of increasing concern about the Labour government's ability to exercise fiscal constraint.
Thirty-year gilt yields rose to 5.723%, their highest since May 1998, and sterling was by far the day's weakest performing G10 currency against the dollar, down over 1.5% at one point.
It was last off 1.0% at $1.34 , its biggest daily fall since June, and at 86.98 pence per euro, 0.6% softer.
Source : Reuters
