UK 10year gilt yield rises to highest since Aug 2008
Sterling falls 1.2 vs dollar to weakest since April 2024
Speed of selloff surprises analysts as no clear trigger
Thirtyyear gilt yield rises to highest since August 1998
Government risks breaking budget rules due to higher debt costs

LONDON, Jan 8 Reuters British government bond prices fell sharply for a second day on Wednesday, pushing 10year yields to their highest since August 2008, while 30year yields hit a new 26year high in a move that will add pressure to government finances.

Sterling tumbled as well, shedding more than 1.2 against the U.S. dollar to hit its lowest since April at 1.2322, in a move that had no obvious trigger from economic data.

Thirtyyear gilt yields which hit a record on Tuesday rose by more than 13 basis points to strike their highest since August 1998 at 5.383.

Benchmark 10year yields rose as high as 4.821, also up 12 bps on the day, breaking past a level that had held since October 2023 and on track for its biggest daily price fall in nine months.

Twoyear gilt yields rose to their highest since February 2024 at 4.576 while fiveyear yields reached their highest since October 2024 at 4.573, both up more than 10 bps on the day.

Gilts underperformed U.S. Treasuries and German government bonds, whose yields rose by around 4 basis points.

This is a global move but it39;s being led by the UK, RBC Capital Markets39; fixed income strategist Megum Muhic said.

Potentially, a reason why…