Are higher borrowing costs a ‘global’ problem?published at 12:42 Greenwich Mean Time
By Ben Chu, BBC Verify policy and analysis correspondent
Challenged on the rise in UK borrowing costs since the Budget, Keir Starmer said: “The global economy is experiencing higher borrowing costs.”
It’s correct that borrowing costs are up across most developed countries over the last month, not just the UK.
Analysts say this likely reflects a sell-off in US government bonds in anticipation of Donald Trump’s potentially inflationary economic policies. The US market moves are, in effect, driving moves in other national markets.
However, UK borrowing costs have risen by slightly more than those of other countries over the last month.
In the UK, 10-year borrowing costs have risen by 38 basis points since 15 December 2024. That’s more than in the US (36 basis points), Germany (37 basis points) and Japan (21 basis points).
Analysts say that relative weakness for the UK could reflect that UK government bonds are seen as less desirable to investors, perhaps due to the UK government’s relatively high levels of borrowing from abroad and the economic outlook.
