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Former UK Prime Minister Liz Truss warned that surging global bond yields reflect runaway government debt and currency debasement, with Britain among the most exposed major economies. The 10-year UK gilt yield has climbed above 5.2% and the 30-year is approaching 6%, up from 5.12% when Truss was in office in 2022. The US 10-year Treasury yield has risen back above 4.8%, fully erasing the decline that followed Treasury Secretary Scott Bessent's bond-buyback announcement.
Why it matters
Truss said the only path forward is supply-side growth paired with spending restraint, but warned the situation may have already gone too far. "I fear, though, the situation has gone too far and we may end up with imposed emergency spending cuts," she said. She also accused the Bank of England of having "printed money and debased the currency." Gilt yields now match the levels that helped force her 2022 mini-budget U-turn, making the warning more than theoretical.
Market impact
The bond selloff is global rather than UK-specific: yields have accelerated across the US, Japan, France, and Germany as debt loads, inflation, and fiscal sustainability compound. Risk assets are feeling the squeeze. Bitcoin has retreated from recent highs of $81,000 but remains above the level before Bessent's intervention. Gold fell from around $4,700 an ounce back to about $4,300, near where it traded when the buyback plan was unveiled. The late-2024 debasement trade is unwinding as real yields climb fast enough to undercut the thesis.
Frequently asked questions
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What did Liz Truss say about the global bond market?
Truss warned that surging global bond yields reflect mounting government debt and currency debasement, with Britain among the most exposed. She said the situation may have gone too far to avoid emergency spending cuts.
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How high have UK gilt yields climbed?
The 10-year UK gilt yield has risen above 5.2% and the 30-year is approaching 6%, up from 5.12% when Truss was in office in 2022.
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What has happened to US Treasury yields?
The benchmark 10-year Treasury yield has climbed back above 4.8%, fully erasing the decline that followed Treasury Secretary Scott Bessent's announcement last month of a buyback program for longer-dated government debt.
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How has the bond rout affected Bitcoin and gold?
Bitcoin has retreated from highs of $81,000 but remains above the level before the Treasury buyback announcement. Gold fell from around $4,700 an ounce to about $4,300, near where it traded when Bessent's intervention was unveiled.
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Is the bond selloff limited to the UK?
No. Yields have accelerated across the US, Japan, France, and Germany, reflecting common pressure from rising debt loads, persistent inflation, and fiscal sustainability concerns.
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