UK borrowing costs hit highest since 2008 as markets expect up to three interest rate rises

Deficit rises unexpectedly to £14.3bn in February as stock markets slide amid fears that Iran war will escalate

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UK government borrowing costs reached their highest level since 2008 on Friday, while financial markets now expect as many as three interest rate rises this year as investors digest the impact of the Iran conflict.

The yield, or interest rate, on 10-year borrowing was pushed to heights not witnessed since the global financial crisis, as investors dumped UK government bonds.