BORROWING COSTS SOAR

GOVERNMENT borrowing costs soared yesterday as investors fretted over the impact of Liz Truss’s plans on the nation’s creaking finances.

The yield on ten-year gilts – the interest the Government pays on parcels of debt it issues to raise cash for spending it cannot cover by taxation – rose as high as 3.147pc.

That was the highest level since 2011.

It effectively means investors are demanding increased interest rates in order to lend to the UK.

Yields on 30-year debt climbed to 3.374pc in the biggest daily jump since the beginning of the pandemic in March 2020.

Sanjay Raja, senior economist at Deutsche Bank, said it expected the ‘vast majority’ of the new package to be paid for through borrowing.