UK gilt yields hit near 19-year high as global bond rout tightens Budget squeeze on Chancellor Healey

From the Newshound archive · first published 24 September 2026.

Ten-year UK gilt yields climbed to 5.38 per cent on Thursday, approaching a 19-year high, as soaring oil prices and concern about further US Federal Reserve rate increases fuelled a worldwide bond market sell-off. Analysts caution that the surge has already eaten into well over half of the £24bn headroom Chancellor John Healey had set aside against Labour's budget rules, leaving him severely constrained as next month's Budget approaches. The upheaval came just as Prime Minister Andy Burnham was defending his assertion that Britain is too 'in hock' to bond markets, insisting his original remarks had been taken out of context. Yields were below 5 per cent when Burnham entered office and have now risen to levels last seen in 2007.

Japan's 10-year bond yield reached its highest point since 1996, while US Treasuries endured their steepest single-day sell-off since Trump's 'liberation day' last year.

Treasury sources describe the Budget as 'focused', with significant spending decisions put off — but Healey has pledged to satisfy fiscal rules with a 'buffer against uncertainty'.