Former U.K. Prime Minister Liz Truss has warned that the global rise in bond yields is exposing the risks of heavy government borrowing and currency debasement, with Britain among the developed economies facing the most severe strain.
Truss attributed the surge in yields to mounting public debt and what she described as the erosion of currencies. She pointed to the U.K. as a particularly concerning example and criticized the Bank of England for expanding the money supply and weakening the currency.
U.K. borrowing costs have risen sharply. The 10-year gilt yield has moved above 5.2%, while the 30-year yield is nearing 6%. The 10-year yield was 5.12% when Truss was in office in 2022.
The pressure has spread across major bond markets. Yields have also climbed in the U.S., Japan, France and Germany, reflecting concerns about rising debt burdens, inflation and whether governments can maintain sustainable fiscal policies. Because bond prices fall as yields rise, the moves indicate a broad decline in sovereign debt prices.
Truss said the preferred response would be to boost economic growth through supply-side reforms while limiting government expenditure. She warned, however, that policymakers may have allowed conditions to deteriorate so far that emergency spending cuts could eventually be required.
U.S. Treasuries have also reversed their earlier gains. The 10-year Treasury yield is now above 4.8%, wiping out the decline that followed Treasury Secretary Scott Bessent’s announcement last month of a buyback program for longer-term government bonds. The yield had fallen to roughly 4.62% after the announcement.
Assets viewed as potential hedges against currency debasement have also retreated. Gold reached approximately $4,700 per ounce before falling toward $4,300, close to its level around the time the intervention was announced.
Bitcoin has likewise given back part of its advance. BTC climbed from roughly $64,000 to around $81,000 before sliding to approximately $76,500. Despite the retreat, bitcoin remains significantly above its pre-announcement price.
