Government issues debt at highest interest rate since financial crisis on eve of Budget

The Debt Management Office has been forced to sell nearly £5bn of five-year gilts at their highest interest rate since 2008, underscoring the fiscal challenge facing John Healey on the eve of his maiden Budget. The body responsible for selling the UK s debt said it had issued £4.5bn of bonds maturing in 2032 at a yield of 5.04 per cent on Tuesday. The figure is the highest annual payment since the global financial crisis sent stock markets plunging and interest rates to historic lows. The auction was 3.5 times oversubscribed, the Debt Management Office (DMO) said, as investors looked to hoover up UK government bonds at a time where they are attracting the highest yields of any G7 economy. Government bond yields have climbed sharply since the onset of the Iran war amid escalating concerns over the conflict s inflationary impact and developed economies running persistently large deficits. The yield on the 10-year Treasury the world s most widely traded bond has climbed b