UK government pays highest interest rate on 30-year bond since 1998

High yields threaten to wipe out at least half of the £24bn headroom John Healey was expecting to have for his budget

The UK government was forced to pay the highest interest rate for a 30-year bond since 1998 on Tuesday, underlining the fiscal challenges facing the chancellor, John Healey.

Echoing the global bond market sell-off that has driven up yields, or interest rates, on government borrowing across the main markets, the Treasury paid 5.82% to borrow £4bn.