The gap between UK and German ten-year yields reached 2.26 points in December 2024 — wider than in the month after the mini-budget — and has not returned to its pre-2022 range since. On the IMF's projections of debt and deficit, Britain is not an outlier.
In June 2026 the monthly average yield on ten-year UK government bonds was 4.80%. The equivalent United States figure was 4.47%, Germany's 2.97% and Japan's 2.67%.1 Britain's was the highest of the seven G7 economies — as it has been in every month since August 2024.
That is a change of position rather than simply a change of level. In January 2020 the UK ranked fourth of seven on the same measure, below the United States, Canada and Italy. Every G7 yield has risen since; the UK's rose furthest, by 4.07 percentage points against 1.93 for Canada.1 Part of that reflects where each country started, so the ranking is the safer read.
In October 2022, the month after the mini-budget, the UK ten-year yield sat 1.92 percentage points above Germany's. In the 32 months from January 2020 to August 2022 the same gap averaged 1.06 points and never once reached the October 2022 level. From November 2022 to June 2026 it averaged 1.78 points and matched or exceeded the October 2022 figure in 15 separate months, peaking at 2.26 points in December 2024.1
The comparison with the United States runs differently. The UK yield sat about a point below the American one through 2020 and 2021, crossed above it in October 2022, and has since traded either side: of the 45 months from October 2022 to June 2026, the UK was above the US in 30 and below in 15. The June 2026 gap was 0.33 points. One reading is that the durable repricing has been against the euro area and Japan rather than against the United States.
Ranking the seven G7 yields month by month shows how recent the UK's position is. Across the 41 months from January 2020 to May 2023, the UK never once recorded the highest monthly average of the group: the top spot passed between the United States, Italy and briefly Canada. The UK first took it in June 2023, held it for three months, and has held it without a break since August 2024.1
IMF projections compiled by the Institute for Fiscal Studies put UK general government gross debt and the fiscal balance in the middle of the advanced-economy pack rather than at the edge of it. On those projections the UK was expected to deliver a fiscal consolidation of 2.2% of GDP between 2025 and 2030, against an advanced-economy average of 0.3%, and to see gross debt rise by 2.2% of GDP against an average of 3.2%.3 Those are forecasts made in 2025, not outturns, and they are not cyclically adjusted.
So the highest borrowing cost in the G7 does not sit on the worst debt or deficit numbers in the G7. What the gap measures, and what it is evidence of, is where the disagreement lies.
These are monthly averages. They cannot show intra-month movement, including the specific days in September and October 2022 when gilt prices moved fastest, and they understate both peaks and troughs. The OECD series is published with a lag: June 2026 was the most recent month available for all seven countries when this piece was compiled, and yields have moved since.1 Splitting a yield into expected policy rates and a term premium requires a model, and the Bank of England and Barclays use different ones; neither publishes a settled figure for how much of the UK gap is term premium. Nothing here isolates cause — the coincidence of higher gilt supply with a wider gap is observational, and estimates of the neutral interest rate are ranges rather than measurements.
Both readings accept the same numbers. They disagree about which component of a yield the gap is sitting in — and that is a question evidence can in principle settle, once the decomposition is agreed.
The Bank of England attributes the UK's position at the top of its peer group on long rates in part to the relatively higher level of UK short rates.2 Consensus estimates place the UK's neutral nominal policy rate at 3.25–3.75%, above the Federal Reserve's 2.50–3.50% and the European Central Bank's 1.75–2.25%; on that basis gilt yields are structurally higher for monetary reasons, not fiscal ones.3
The Bank identifies term premia — not rate expectations — as the primary driver of the increase in long rates through 2025, amplified in the UK by gilt market demand and supply.2 Net gilt supply has run above 4% of GDP, while the share of gilts held by pension funds and insurers fell from 39% in 2008 to 21% by mid-2025 as the Bank ran down its own holdings.3