Global bond sell-off piles new pressure on UK borrowing costs before budget

Rising cost of 10-year gilt to near 19-year high hikes upfront cost of government investment and limits chancellor’s room for manoeuvre

• International bodies warn of rising debt and borrowing risks

• Burnham stands by claim UK is ‘in hock’ to bond markets

A global sell-off in government bonds has put fresh upward pressure on UK borrowing costs, before a tough budget for John Healey next month.

The yield – effectively the interest rate – on 10-year UK bonds, known as gilts, had risen to 5.38% by mid-morning on Thursday, approaching the 19-year high set last week.