Government borrowing costs are firmly back to where they were before Kwasi Kwarteng’s disastrous mini-Budget.
The yield on the 30-year gilt – essentially how much interest investors demand for lending to the Government – slipped to 3.68 per cent, a level not seen since September 22.
This is down from the peaks of more than 5 per cent on September 28 and October 12, when investors were worrying just how much the then-chancellor’s unfunded tax cuts would cost.
Upset: The yield on the 30-year gilt slipped to 3.68pc, a level not seen since September 22 in the wake of former chancellor Kwasi Kwarteng’s disastrous mini-Budget
Gilt yields indirectly affect the cost of mortgages. In the aftermath of the mini-Budget, the interest rate charged on an average fixed-rate mortgage jumped over 6 per cent. A year ago, they were just over 2 per cent.
Yields have been falling since Liz Truss resigned on October 20.
Further slides after Rishi Sunak was revealed as Prime Minister on Monday demonstrated investors’ confidence in the former chancellor.
Josh Mahony, senior market analyst at trading platform IG Group, said Sunak’s appointment ‘has spared markets any additional uncertainty’.
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