The cost of UK government borrowing increased again to the greatest level since 2008 amid the financial crisis as a result of the falling value of the pound.
It’s because Chancellor Kwasi Kwarteng’s mini-budget outlined tax cuts which means the billions needed to help households with their energy bills will have to be borrowed.
When governments want to borrow money, they sell bonds – usually bought by international investors – and the loan gets added on to the national debt.
The larger the national debt gets, the more interest the government has to pay on all the bonds it has sold.
Until recently, the government was able to borrow very cheaply, at rates of less than one percent.
But interest rates have been going up, and so has the government’s interest bill.
The interest on ten-year bonds has risen from 3.83% on Friday to 4.11% on Monday.
Paul Dales, from Capital Economics, says this shows that markets are worried that the government’s tax cuts will force the Bank of England to raise interest rates higher and “a deterioration in the public finances will undermine the UK’s long-term growth prospects”.