Leading economies’ borrowing costs hit highest since 2008 crisis
Concern over impact of Iran war pushes up government bond yields in US, UK, France, Germany and Japan Government borrowing costs in several advanced economies hit their highest level since the 2008 financial crisis, or even earlier, on Monday as investors feared the Middle East crisis would keep inflation persistently high. Concerns over rising prices and government spending pushed up the cost of…
Government borrowing costs have reached their highest levels since the 2008 financial crisis, driven by worries that the Middle East conflict could keep inflation elevated. In Paris, Berlin, Washington DC, Tokyo, and London, the cost of debt soared as investors feared interest rates would climb in response to persistent price increases.
The 30-year French bond yield climbed to a 16-year high, while Germany's 10-year bond also hit a new peak. The European Central Bank is almost certain to raise interest rates in September to combat inflation, according to market data. The Middle East crisis has also pushed oil prices up by 6%, with Brent crude reaching a three-decade high.
In the United States, long-term borrowing costs hit their highest level since the credit crunch, with the 30-year Treasury yield hitting 5.29%, its highest since 2007. Japan's 10-year government bond yield surged to a three-decade high, reflecting expectations that the Bank of Japan would raise rates soon to support the yen. Analysts noted that Japan's bond market has become increasingly skeptical, and the Bank may have to choose between supporting a fragile economy and curbing inflation.
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