UK borrowing costs soar day after Labour government unveiled tax-raising budget

LONDON — U.K. bond yields spiked sharply Thursday after the ruling Labour Party unveiled a sweeping package of tax hikes and increased borrowing.

The 2-year gilt yield was up 18 basis points at 2:13 p.m. London time, after briefly breaching 4.5% earlier in the session for the first time since Labour took office in early July. The 10-year yield jumped 15 basis points to 4.497%.

Yields had already risen on Wednesday shortly after the budget announcement by Finance Minister Rachel Reeves, which contained plans for £40 billion ($52 billion) worth of tax hikes and committed to substantially higher borrowing in the coming years.

Yields move in the opposite direction to prices.

This is a breaking news story and will be updated shortly.