Chancellor will have to muddle through the budget, but market jitters are not specific to the UK

The last time yields on 30-year UK government bonds were this high, Rachel Reeves was a first-year student at Oxford, getting to grips with economics.

- Heather Stewart

The last time yields on 30-year UK government bonds were this high, Rachel Reeves was a first-year student at Oxford, getting to grips with economics. The chancellor could be excused a moment of nostalgia for such innocent times after waking yesterday to a barrage of headlines about Keir Starmer taking back control of economic policy - and a fresh sell-off in the government bond, or gilt, markets.

Alongside rising yields, meaning the government must pay more to service its debts, sterling was also declining on the foreign exchange markets, losing 1% against the dollar by mid-morning. This combination - rising yields and a declining currency - is often viewed as a warning signal of fragile investor confidence. The 10-year yields the Office for Budget Responsibility uses to forecast future borrowing costs were also on the rise, hitting the highest level since January at 4.82%.

Despite dark predictions about a 1970s-style budget crisis, market watchers were quick to point out that rising yields, particularly for longer-term government bonds, are not a UK-specific phenomenon.