Part 7/12:
Interest rates are also on the rise. The 10-year government bond yield currently stands at approximately 4.63%, nearly 50 basis points higher than a year ago. This increase in yields is linked to ballooning government borrowing—June saw a borrowing of over £20 billion, more than triple the amount from the same period last year. As a result, government debt is exceeding forecasts, forcing policymakers into difficult choices: raising taxes, cutting spending, or increasing borrowing even further. Each option carries significant political and economic risks.