Gold hits highest level in three months as traders worry about US inflation and bond market jitters – business live

The UK government has sold £3.9bn of seven-year bonds at the highest yield for equivalent bonds this year – and, it appears, the highest since 2002.

The Debt Management Office sold gilts maturing in 2033 at a yield (or interest rate) of 4.761% this morning, the highest in any seven-year bond auction this year. That’s up from 4.519 for a similar auction in July, indicating that the government’s borrowing costs have risen.

Demand was decent, with more than three times as many bids as debt (the bid to cover ratio was 3.39).

My colleague Graeme Wearden squinted at the data and reckons it is the highest yield for this duration bonds since 2002 when the government sold 2008 bonds (so almost seven years!) in an auction at a 5.07% yield.

This comes after last week’s sell-off in government bonds globally, which pushed yields to multi-decade highs, which prompted the US Treasury Department to step in to calm the US bond market.