The consequences of last week's mini-Budget have continued to sink in, as 10-year gilt yields spiked to 4.12 per cent on Tuesday, while 2-year yields hit 4.36 per cent as bonds sold off. The Bloomberg UK Government Inflation-Linked Index shed some 9.7 per cent on the day as long-duration assets suffered the worst of the selling.
These jumps represented some of the steepest increases on record, and will feed through to government borrowing costs if high yields are sustained. Yields move inversely to prices.
Higher gilt yields will have a significant impact on mortgage lenders, and there are reports of several providers suspending fixed rate loans in response to market volatility and sharply rising yields.