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.