Government borrowing costs around the world have surged to their highest levels in decades, driven by turmoil in the US bond market. Anxiety over Donald Trump's handling of the economy, combined with fears that his conflict with Iran is fuelling inflation, has triggered a sell-off in US Treasury bonds, and because they underpin global financial markets, the resulting rise in yields has spread to the UK, France, Germany and Japan, threatening far-reaching consequences for consumers and businesses everywhere.

The 30-year US Treasury yield has climbed above 5%, its highest since 2007, prompting Treasury secretary Scott Bessent to pledge doubling purchases of long-term bonds, a move that only briefly calmed markets. UK 10-year rates are near 2008 highs, France is at a 16-year peak, Germany's yields sit at 2011 levels, and Japan's borrowing costs are the highest since 1996. Analysts point to the breakdown of US-Israel-Iran ceasefire talks, the US national debt hitting $40tn, rising oil prices and political uncertainty—including doubts over central banks' inflation response—as key drivers of investor unease.