UK long-term borrowing costs reach 28-year high

UK long-term borrowing costs reach 28-year highJust nowShareSaveAdd as preferred on GoogleFaisal Islam,Economics editorandRachel Clun,Business reporterGetty ImagesLong-term UK borrowing costs have reached their highest level since 1998 as the Iran war continues and concerns rise over political uncertainty in the lead-up to local and national elections.Government bond markets for major economies have all fallen since the US-Israeli conflict with Iran began, meaning the effective cost of borrowing for governments has shot up.There have been extra jitters in UK government debt markets ahead of Thursday's elections. On Tuesday afternoon the yield on 30-year government bonds reached a 28-year high, while the yield on 10-year bonds reached an 18-year high.The Iran war has led to the effective closure of the Strait of Hormuz. That closure has impacted the world's supplies of oil and liquid natural gas, and caused energy prices to skyrocket.Markets have reacted to these events by factoring in higher inflation and borrowing costs, and those factors have led to a global rollercoaster on bond markets.Over the weekend, bond markets went further in the wrong direction, reflecting assumptions of a prolonged blockage of the Strait of Hormuz.However, the impact on UK markets has exceeded that in other G7 nations, which traders put down to a more inflation-prone economy, and, in the past few days the prospects of more political instability around the raft of elections.The Labour Party is expected to lose hundreds of council seats, and face challenging national elections in Scotland and Wales. Over the weekend there was also widespread speculation about possible leadership challenges. The government points to an improvement in growth, inflation and borrowing figures earlier this year, before the onset of the war in Iran.Chris Mason: Elections this week set to show how politics is changingBowen: Strait of Hormuz standoff raises risk of sliding back into all-out warThe 30-yea...