UK government borrowing costs climbed to multi-decade highs as investors sold global bonds amid inflation concerns and a sharp rise in oil prices. Crude rose more than 5% at one point, while Brent crude topped $105 a barrel amid attacks on tankers and pressure on US oil output in the Gulf of Mexico as storm Isaias approached.
Yields on 20-year and 30-year gilts also reached levels last seen in 1998, with both exceeding 6%.
The sell-off later eased. Rising yields mean falling bond prices and point to higher government borrowing costs.
The moves extended beyond the UK, with government bond yields rising sharply in the eurozone and United States. French bonds faced pressure as the government worked to address its debt position and pass its 2027 budget, while the euro moved close to a 17-month low.
The market shift adds pressure on Chancellor John Healey ahead of his first budget on 28 October.