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Fri, 20 Mar 2026

Fri, 20 Mar 2026 UK borrowing costs hit highest level since 2008 financial crisis

The interest rate on government debt is climbing over fears about inflation, interest rates, and public spending, experts have said.

* UK government borrowing costs have reached their highest level since the 2008 financial crisis, hitting 5% due to concerns over higher interest rates and sticky inflation.
* The government's 10-year borrowing rate (yield) has reached an 18-year high, while February's borrowing figure of £14.3bn is the second-highest on record.
* Experts say that the energy price surge caused by the US-Israel war with Iran will make it less likely for the government to offer large-scale fiscal support packages to households and businesses.
* Economists predict that annual household energy bills could rise by £332 in July, but this figure may change.
* The government's debt sell-off is partly due to concerns about higher interest rates and sticky inflation, as well as the potential public cost of helping households with energy bills.
* Government borrowing for February was affected by the timing of payments, including interest due at the end of January falling into February.
* The increase in government borrowing has put a halt to hopes that it would be reined in after tax rises helped create a record surplus in January.
* Around £1 in every £10 is still spent on debt interest, which ministers say needs to be addressed so more can be spent on public services.