The cost of UK government borrowing has surged to levels not seen since the 2022 bond market meltdown — and this time, Britain is paying an even steeper premium compared to Germany.
Yet, where is the uproar? Where are the headlines? Where is the BBC, the Bank of England, the Guardian, the FT and the rest of the mainstream media, who spent weeks mercilessly berating Liz Truss? Now that the figures are worse, they remain silent. Why?
The difference between UK and German 10-year bond yields — known as the spread — has now ballooned to a staggering 229 basis points. If this trend continues, it will mark the largest gap since German reunification in 1990, far surpassing the turmoil seen after Truss’s mini-Budget. Back then, the BBC and media pundits could barely catch their breath in their relentless attacks on her economic plans. And yet, as bond yields now spiral higher under the current government, there’s barely a whisper.
The Worrying Reality
The surge in yields — the interest the government pays on its debt — stems from a sharp reassessment of the Bank of England’s ability to cut interest rates as previously hoped. Following official figures showing an unexpected jump in wage growth, traders have slashed their bets on interest rate cuts for next year.
Wages in the three months to October surged by 5.2%, up from 4.9%, and total pay, including bonuses, rose by the same amount. Both figures outstripped expectations and signal that inflationary pressures remain persistent.
As a result, money markets now suggest the Bank of England may not cut interest rates until as late as May 2025, with the likelihood of three cuts next year collapsing from 80% to just 40%.
A Premium We Can’t Afford
While UK borrowing costs spiral, Germany’s bond yields remain relatively low, highlighting the premium Britain now pays to attract buyers for its debt. The widening spread is a clear sign that investors see the UK as a riskier bet than its European counterparts — a deeply concerning indictment of the nation’s fiscal and monetary direction.
Economic experts have sounded the alarm. Rob Wood, chief UK economist at Pantheon Macroeconomics, told the Telegraph:
“Facing this renewed trade-off between weaker growth and still strong inflation pressures, the Monetary Policy Committee will keep interest rates on hold this week and will have to proceed cautiously. We expect three 25 basis point rate cuts next year.”
Meanwhile, Andrew Wishart of Berenberg highlighted the troubling mix of rising wages and falling employment:
“A nasty cocktail of falling employment and strong pay will make uncomfortable reading at the Bank of England.”
Where is the Outrage?
The parallels with 2022 are glaring. Back then, Liz Truss and Kwasi Kwarteng’s mini-Budget sparked a media feeding frenzy. The BBC, politicians, and pundits spent weeks pinning the blame squarely on Truss, using the spike in bond yields as evidence of incompetence and recklessness. And yet today, when bond yields are even higher and the UK is paying the steepest premium in decades, the media is curiously silent.
Why the double standard? Why the selective outrage? Could it be that Truss was an easier target? Or that the media are now reluctant to hold Labour’s economic stewardship to the same level of scrutiny?
A Dangerous Silence
This silence is more than hypocrisy — it’s dangerous. Higher bond yields mean higher debt repayments, which will drain public finances and leave less money for vital services like the NHS, schools, and defence. The British public deserve to know why borrowing costs are spiralling and why Britain is now considered a riskier market than Germany.
If this premium persists, it could have far-reaching consequences for the economy. And yet, as the crisis unfolds, the same media and institutions that couldn’t stop criticising Liz Truss are now nowhere to be seen.
The question remains: Why aren’t the BBC, MPs, and the Bank of England sounding the alarm? Why aren’t they holding the current government to account as they did in 2022? The silence is deafening, and it reeks of double standards.
The public deserves answers. If bond yields at crisis levels warranted outrage two years ago, they demand even greater scrutiny now. The cost of looking the other way is far too high. Britain cannot afford to sleepwalk into another economic crisis.
Picture by Rory Arnold / No 10 Downing Street. Source: Uk Government in 2022 Copyright. CC BY-NC-ND 2.0
