UK 10-year borrowing costs rise to 19-year high after oil prices jump

British long-term borrowing costs soared to a 19-year peak on Thursday as global bond markets experienced a significant sell-off. This surge was primarily driven by a sharp increase in oil prices, which were propelled by attacks on shipping in the Gulf and fears of a hurricane disrupting US oil production. Ten-year gilt yields, which are the benchmark for much of Britain's recent borrowing, rose to their highest level since July 2007 at 5.527%, marking a jump of more than 7 basis points from the previous day.

This surge pushed the yields past the earlier peak of 5.51%, set last week. Additionally, the twenty-year and thirty-year gilt yields also hit their highest levels since early 1998, reaching 6.00% and 6.05% respectively, reflecting a similar 7 basis point rise alongside the US Treasuries. The jump in oil prices was particularly pronounced, with Brent crude oil prices surging 5% to $105 a barrel, marking their highest level since September 29.