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British government borrowing costs rose slightly on Friday but remained below Thursday’s highs as investors awaited key US jobs data later in the day.
The 10-year annuity yield rose 0.03 percentage points to 4.84%, but remains below Thursday’s 4.93%, its highest level since 2008. Yields move inversely to prices.
The pound fell slightly against the dollar, down 0.2% to $1.229.
Government bonds have struggled in recent trading as bond yields rise globally on the back of persistent inflation in some large economies.
Analysts say the December U.S. jobs report, due later on Friday, will determine the direction of bond yields, including government bonds.
The UK has been particularly hard hit by the global stock sell-off as investors worry about the government’s large borrowing needs and the growing threat of stagflation, which is a combination of anemic economic growth and persistent price pressures. are receiving.
The credibility of the government’s economic plans has become vulnerable to strain on the bond market after Chancellor Rachel Reeves left just £9.9bn of room for amendments to fiscal rules in last autumn’s budget.
Since then, rising gold output has threatened budgetary space. The level of bond yields is a key factor in determining budget space, given its impact on the government’s interest bill of more than £100bn a year.
Labor has sought to reassure investors this week, with Darren Jones, Britain’s No. 2 at the Treasury, telling MPs on Thursday the government is committed to “economic stability and sound public finances”.