UK borrowing costs hit a 19-YEAR HIGH as Healey's conference speech fails to calm markets

From the Newshound archive · first published 28 September 2026 · last updated 29 September 2026.

UK gilt yields climbed to their loftiest point since 2007 after Chancellor John Healey's Labour conference speech left investors unconvinced, with ten-year gilts breaching 5.44 per cent. Trump's rejection of an Iranian offer to reopen the Strait of Hormuz sent oil prices toward $109 a barrel, sparking a global bond sell-off that swept up UK, US, German, French and Italian debt. Analysts warned Healey's speech was "big on rhetoric" but "light on specifics," leaving markets unimpressed ahead of his first budget next month.

At roughly $109 a barrel, oil is near its costliest since March, when the Iran conflict first drove prices sharply higher — and Britain's borrowing costs, already the steepest in the G7, are drawing fresh scrutiny from investors unnerved by Labour's spending plans and reluctance to cut expenditure.

Markets are now pricing in a Bank of England interest rate rise in November — the first since the Iran war began — with another expected in February.

A Citi survey shows public expectations for long-run inflation have climbed to their loftiest point since March, when the outbreak of the Iran conflict first caused them to jump.