Story perspectives

Gilt Yields Reach 1998 High; Reeves Warns Debt Costs

5/7/2026

Summary

Gilt Yields Surge

The 30-year gilt yield rose to 5.78%, the highest since 1998, while the 10-year yield climbed to about 5.10%.
Investors linked the surge to uncertainty before Thursday's local elections and to oil prices above $100 after the Strait of Hormuz closure.
Chancellor Rachel Reeves warned that higher yields will increase debt-interest costs and constrain public-spending limits.
Bank of England Governor Andrew Bailey downplayed gilt-market worries, citing the pound’s strength.

Summary

Starmer Resignation Odds

Bank of England said cumulative QE loss rose to £125 billion from £115 billion, with the Treasury covering it under an indemnity agreement.
Polymarket odds put the probability of Prime Minister Keir Starmer resigning under 10 % now but near 70 % by year-end if Labour loses badly in local elections.
Former Deputy Prime Minister Angela Rayner is under investigation for her tax affairs, adding investor wariness to any potential leadership change.

History

Historical Context

During the 2008 crisis the Bank of England cut its base rate to 0.5% and launched a £150 billion quantitative-easing programme in March 2009, while G-20 leaders convened in November 2008 and April 2009 to coordinate stimulus. Today, 30-year gilt yields hovering around 5.8% revive concerns as the Treasury now faces heightened debt-service costs, testing the durability of post-crisis fiscal policies.

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Gilt Yields Surge

The 30-year gilt yield rose to 5.78%, the highest since 1998, while the 10-year yield climbed to about 5.10%.
Investors linked the surge to uncertainty before Thursday's local elections and to oil prices above $100 after the Strait of Hormuz closure.
Chancellor Rachel Reeves warned that higher yields will increase debt-interest costs and constrain public-spending limits.
Bank of England Governor Andrew Bailey downplayed gilt-market worries, citing the pound’s strength.

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