UK becomes first G7 nation to pay 6% to borrow since eurozone crisis as bond rout batters Burnham

From the Newshound archive · first published 1 October 2026 · last updated 2 October 2026.

UK 30-year gilt yields have breached 6% for the first time since 1998, with analysts warning each one-point rate rise adds £15bn to debt costs by 2031.

Britain's 30-year gilt yields hit 6.03 per cent on Thursday — a level last seen in 1998 and matching what investors charged beleaguered Italy at the height of the 2012 eurozone crisis. The FTSE 100 lost 1.7 per cent, UK bank stocks cratered, and homeowners face rising mortgage costs as the global bond sell-off deepens. Analysts point to Labour's failure to grip the ballooning benefits bill and a threadbare energy strategy as fuelling specific investor distrust in Britain, on top of Middle East war pressures pushing oil above $100 a barrel. Energy analysts now warn household bills could surge toward £2,076 in early 2027 — a near-20 per cent rise — just as the Budget looms.

UK banks were among the hardest hit, with NatWest shedding 6.1 per cent and Barclays, HSBC and Lloyds all falling sharply.

Britain now carries the steepest borrowing costs in the G7, having overtaken Italy — once considered the bloc's basket case.

Chancellor John Healey has summoned the heads of Barclays, HSBC and Lloyds to a pre-Budget meeting, stoking fears of a fresh bank tax on October 28.

Daily MailUK becomes first G7 economy to pay 6% to borrow since eurozone crisis Daily MailBurnham's bond nightmare will mean bigger energy bills: ALEX BRUMMER Evening StandardUK borrowing costs soar as gilt yields hit 6% for first time since 1998 ReutersUK banks tumble as gilt yields hit highest since 1998, budget jitters mount

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