What’s driven the recent rise in UK government bond yields?

The turn of the year has seen a sharp increase in the cost of borrowing UK sovereign debt, as investors sought to offload government bonds (or “gilts”). As of Thursday 9 January, 10-year gilt yields stood at their highest since mid-2008, when the global financial crisis was intensifying, and the yield on longer-dated 30-year debt rose to its highest since 1998. This was accompanied by a sharp fall in sterling, which hit its lowest level against the US dollar in over a year. The simultaneo