Burnham beware, the bond markets will demand proper answers in the budget | Nils Pratley

<p>Fair to say the current sell-off is international, but the PM has said little yet to make investors rethink the UK’s status</p><p>It’s too soon to say the bond markets have turned on Andy Burnham. Tuesday’s spike in gilt yields, taking the UK’s 30-year borrowing costs <a href="https://www.theguardian.com/business/2026/sep/01/uk-gilt-yield-long-term-borrowing-costs-28-year-high">to their highest level since 1998</a>, was part of <a href="https://www.theguardian.com/business/2026/sep/02/global-bond-sell-off-us-iran-tensions-inflation-fears">an international sell-off of government debt</a>.</p><p>The main contributors are well known. The Iran war, by increasing the cost of energy, has overturned the comforting start-of-the-year thesis of falling global inflation and interest rates. A plunging Japanese yen has kicked away another assumed source of financial stability. The US treasury secretary, Scott Bessent, hasn’t calmed nerves with his solo, and so far futile, <a href="https://www.theguardian.com/business/2026/aug/29/scott-bessant-us-economy-donald-trump">attempt to bring down US yields</a>. Meanwhile, the early stage of the AI revolution is an exercise in issuing squillions of debt before long-term returns on capital can possibly be assessed meaningfully.</p> <a href="https://www.theguardian.com/business/nils-pratley-on-finance/2026/sep/02/burnham-beware-bond-markets-demand-answers-budget">Continue reading...</a>