Borrowing costs on UK’s debts hit by biggest monthly rise since 1986

Heaping pressure on incoming prime minister, 10-year government bond yields shoot up to 2.78%

Fears of a long recession and the likelihood of higher public spending to cope with the cost of living crisis have sent the interest rate on Britain's debts soaring towards its biggest monthly rise in almost 40 years.

Ten-year UK government bond yields, which are a proxy for the effective interest rate on public borrowing, hit 2.78% to register the biggest monthly rise since September 1986.