UK 30-year bond yield hits highest since 1998 amid global sell-off

The yield on Britain’s 30-year government bond reached 6% on Thursday, its highest level since 1998, as a global bond sell-off drove up borrowing costs amid concerns over inflation and elevated energy prices.

The yield climbed to 6%, according to London Stock Exchange Group (LSEG) data. Bond yields rise as prices fall.

The increase came as higher oil prices and uncertainty surrounding the conflict in the Middle East weighed on government debt markets. Brokerage XTB said Britain’s 30-year yield had crossed 6% for the first time since 1998, with Brent crude trading around $100 per barrel.

The Bank of England warned Wednesday that the financial stability risk outlook had deteriorated since July, citing renewed tensions in the Middle East and growing financial exposures linked to artificial intelligence.

In the record of its Financial Policy Committee’s Sept. 25 meeting, the UK central bank said rising oil, gas and refined petroleum product prices were prolonging the negative supply shock to the global economy and increasing uncertainty over growth and interest rates.

Persistently higher government bond yields could tighten financing conditions for households and businesses, increase market volatility and limit governments’ ability to respond to future shocks, the bank warned.

The committee said the financial system had remained resilient, with market adjustments mostly gradual. However, elevated hedge fund leverage in the gilt market and increasingly interconnected vulnerabilities meant the risk of a sharp adjustment persisted.