Saralnama
The cost of UK government borrowing has risen to nearly a 27-year high, with the 30-year bond yield reaching 5.62% on 25 Aug 2025. This increase raises the cost of financing government debt to over £100 billion annually. Chancellor Rachel Reeves faces pressure to address a large budget deficit expected between £20 billion and £40 billion in the upcoming autumn budget. To manage this, she may need to find £30 billion to £50 billion through tax changes, spending cuts, or more borrowing. Experts warn that the UK’s economy faces challenges like stagnant productivity and high inflation. There are concerns about the government’s ability to control public debt and the risk of a financial crisis if borrowing costs rise further. The Treasury plans to auction £300 billion of debt this year, with a £5 billion auction scheduled soon. The situation is seen as vulnerable, with calls for stronger fiscal measures to restore market confidence. (Updated 26 Aug 2025, 22:17 IST; source: link)