The UK's long-term borrowing costs hit a 27-year high as the government was forced to pay a premium on newly issued bonds, adding to the pressure on the Chancellor ahead of the autumn budget.
The interest rate on the 30-year government bonds rose by 0.06% on Tuesday, hitting 5.7%, the highest level since 1998.
Borrowing costs on two and ten-year bonds also jumped by 0.03% while the pound fell more than 1% against the dollar.
Mark Dowding, chief investment officer at RBC BlueBay Asset Management, said rising borrowing costs and a weak currency “reflected concerns that further tax increases from already high levels could damage growth, add to inflation and still leave a sizeable hole in the public finances.
“Markets appear less focused on Treasury rhetoric and more on whether the government can present a credible plan to control spending.”
FTSE 100
The UK's flagship share index, the FTSE 100, was down 15-points at 9,133 shortly after opening this morning.
Brent crude oil futures were up 0.26% at $68.41 a barrel.
Companies reporting today
- Ashtead Group* - Q1 Results
- Bakkavor Group - Half Year Results
- Hilton Food Group - Half Year Results
- M&G* - Half Year Results
- Salesforce* - Q2 Results