The direction of all major world governments explained below.
The UK 10-year gilt yield has hit an intraday high of 5.294% this morning, the highest level since August 2007. That is the same borrowing cost Britain last paid nineteen years ago, but it is now being charged against a completely different public balance sheet.
At the end of August 2007, public sector net debt stood at about £510 billion, or 35.7% of GDP. That was the month the first real tremors of the credit crunch appeared, when BNP Paribas froze investment funds, and it was still weeks before the run on Northern Rock. The Sustainable Investment Rule was intact and the explicit target was to keep the ratio under 40%.
At the end of July 2026 the same measure was £2,985 billion, or 94.1% of GDP. The stock has risen by £2.47 trillion. In nominal terms it is 5.8 times larger. As a share of the economy it is 58 percentage points higher, and nearly 2.6 times the old 40% ceiling.
A 5.29% ten-year in August 2007 sat on a pile of just over half a trillion pounds. The same print today sits on a pile that is closing in on £3 trillion. That is why the interest bill has become a fiscal event in its own right. Debt interest in 2025/26 was already around £109 billion, equivalent to 3.6% of GDP and about 8% of public spending, one of the heaviest servicing burdens in fifty years.
The stock is not being paid off in any meaningful sense. It is being rolled. The DMO still has to sell £252 billion of gilts this fiscal year and refinance another £141 billion or so of maturing stock, and both the new issuance and the refinancing now price against this market rather than last year’s forecast. Each syndication locks the coupon in for ten, twenty or thirty years, which means a larger slice of future tax revenue is already cordened off before anyone gets to schools, defence or the NHS.
This is the part that should worry people. Britain is refinancing a near-£3 trillion debt stock at the highest ten-year yield in nineteen years, and every gilt that rolls off the old cheap coupons comes back on at these ones. The interest is not a one-off shock. It gets built into the stock, then borrowed again to pay itself. That can continue for a long time. It cannot continue forever at a price the Treasury can live with.