Fuel and travel costs are pushing prices up again
Thursday 5 November 2026
Inflation has risen to 3.1%, meaning everyday spending is getting more expensive just as household budgets are already under pressure.
Government bond yield
The return a buyer expects from a government bond at its current price, usually shown as a yearly percentage.
What it means
A government bond is a way for a government to borrow: investors pay for the bond and receive payments under its terms. UK government bonds are called gilts. A bond's yield reflects what a buyer pays for it now and what it promises to pay later. For a conventional gilt, that includes regular interest payments and repayment when it matures. If its price rises while those promised payments stay the same, its yield falls; if the price falls, its yield rises. The yield is different from both the bond's fixed interest payment and the Bank of England's Bank Rate. Different bonds have different yields.
Example
Imagine a gilt promises £5 a year and £100 back at the end. Buying it for £100 gives a different return from buying the same promised payments for £90; the buyer who pays £90 has a higher yield. The exact yearly yield also depends on when it matures.
Why it matters
Bond yields affect the cost of new government borrowing and can influence other borrowing rates. A headline about “the gilt yield” needs a maturity date or bond type to be fully clear.
Also known as
gilt yield
Related terms
-
Bank Rate
The main interest rate set by the Bank of England, which influences rates on borrowing and saving.
Read more -
Debt interest
Interest the public sector pays on money it has borrowed.
Read more -
Public sector net debt
A UK measure of the public sector's outstanding debts after subtracting certain assets it can quickly turn into cash.
Read more -
Quantitative easing
A central bank creating electronic money to buy bonds, aiming to lower longer-term borrowing costs and support spending.
Read more
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