Investors split on gilts as government fights higher borrowing costs amid rising yields

Yields highest in decades

The first two weeks of 2025 have brought the sharpest rise in UK gilt yields in decades, heightening market anxieties about Labour's ability to service its debt and leaving investors on the lookout for a culprit.

Bryn Jones, head of fixed income at Rathbones, described the recent rise in UK gilt yields as "quite a worry". "I would wake up early and not get back to sleep – so I had some early mornings worrying about what was going on," he told Investment Week. When markets opened last Monday (6 January), yields on the UK 10-Year gilt opened at 4.62%, with little change throughout the day, according to data from MarketWatch. Similarly, the UK 30-Year gilt began that week at 5.18%, closing slightly lower last Monday, at around 5.17%. 'Bad news' for Labour as surging gilt yields puts pressur...