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UK borrowing costs climb as ‘stagflation’ fear stalks gilt market

Stubborn inflation and stalling growth have driven yields back to the highs reached after October’s Budget
The UK’s gross domestic product unexpectedly shrank for a second successive month in October

Worries over the stagnating UK economy and accelerating inflation are unnerving investors, pushing borrowing costs to their biggest premium over German debt yields since 1990.

The spread between the two countries’ bonds has risen above 2.3 percentage points, the highest since German reunification and eclipsing the peak reached after Liz Truss’s ill-fated “mini” Budget two years ago.

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