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UK Borrowing Costs Soar: Tax Hikes Loom Amid Crisis

1/8/2025

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Summary

Story summary

UK long-term borrowing costs hit a 25-year high, with 30-year gilt yields at 5.22%.
Chancellor Rachel Reeves is urged to consider tax increases or spending cuts due to limited fiscal space.
Economists caution about possible breaches in fiscal rules, with just £1 billion remaining before critical decisions.
Increasing yields signal investor anxiety over stagflation and government financial stability amid global bond market fluctuations.

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Story summary

UK long-term borrowing costs hit a 25-year high, with 30-year gilt yields at 5.22%.
Chancellor Rachel Reeves is urged to consider tax increases or spending cuts due to limited fiscal space.
Economists caution about possible breaches in fiscal rules, with just £1 billion remaining before critical decisions.
Increasing yields signal investor anxiety over stagflation and government financial stability amid global bond market fluctuations.