UK Borrowing Costs Hit 23-Year High as Christmas Uncertainty Looms

The UK is bracing for a potentially costly Christmas as borrowing costs soar and energy prices rise.

UK borrowing costs have reached their highest level since 1998, with markets pricing in five interest rate rises by November 2027 to contain inflation.

The yield on 30-year government bonds has climbed above 5.95%, while the Bank of England faces an uncertain choice: raising rates to combat inflation or risking further pressure on households and businesses.

Energy bills could rise by 25% in January, pushing petrol prices to their highest level in four years and adding pressure at the pumps.