The UK's strategy to prop up long-maturity debt by selling fewer bonds since the 2022 Liz Truss crisis is failing. Thirty-year gilt yields have climbed to the highest since 1998, nearing 6%, despite the Debt Management Office (DMO) shifting sales to shorter maturities to match weakening pension fund demand. The Bank of England may halt its long-bond sales, but lower supply has done little to calm one of the most sensitive sovereign bond markets.

Fred Repton of Neuberger Berman cites "muscle memory" from the Truss era, warning yields and refinancing costs look "precarious." Bloomberg Economics estimates higher borrowing costs and inflation will erase £16 billion ($21.6 billion) of the government's £23.6 billion fiscal buffer for 2029. The weighted average maturity of UK debt has dropped to 11 years from over 18 in 2020, far faster than global peers. RBC strategist Megum Muhic notes the DMO is now "reactionary" to markets, and even a BOE sales halt would have marginal impact.

Global forces — Iran war inflation fears and AI-driven corporate borrowing — keep long yields elevated. Investors say material relief requires aggressive BOE tightening or a sharp global downturn.