UK Long-Term Yields Hit 5.6% Amid Global Market Stress, Echoing 2022 Pension Shock

A surge in global borrowing costs has rattled markets once again, with the yield on the UK’s 30-year gilt reaching 5.6%—its highest level since 1998. The move has revived fears of structural fragility in the UK’s financial system, last exposed during the pension fund crisis of 2022.

This renewed spike in yields comes as markets absorb the latest fallout from intensifying global trade tensions. President Donald Trump’s sweeping tariff proposals have raised fears of rising inflation, weakened global growth, and a return to policy uncertainty that many hoped had been left behind.

Risk assets have slumped in response. Since last Thursday, the Nasdaq has fallen 10%, and bitcoin (BTC), often treated as a hedge during periods of macro stress, has shed 8%. Meanwhile, 30-year gilt yields have risen by 8%, and U.S. yields on the same tenor have jumped 12%, underlining a synchronized move in global rates.

According to Charlie Morris, founder of ByteTree, the gilt market is signaling deep-rooted concerns about fiscal sustainability.

“The UK hasn’t balanced its budget in more than two decades. The bond market is drawing a line,” Morris said. “In times like these, investors tend to pivot toward hard assets — and bitcoin is firmly in that conversation now.”

The move in gilts has reignited comparisons to the crisis of late 2022, when a surprise mini-budget under then-Prime Minister Liz Truss sent shockwaves through financial markets. At the time, many UK pension funds employing liability-driven investment (LDI) strategies were forced into emergency asset sales, creating a downward spiral that nearly broke the system — until the Bank of England stepped in with emergency bond purchases.

Though the UK gilt market is modest in size — roughly $1.5 trillion compared to the $9.9 trillion U.S. Treasury market — its lack of depth and high concentration among institutional holders left it especially vulnerable. A post-crisis review by the Federal Reserve Bank of Chicago highlighted excessive leverage, market opacity, and structural mismatches as key fault lines.

With borrowing costs climbing rapidly and trade risks deepening, policymakers and investors alike are watching closely for signs of stress — especially in markets that have already proved fragile under pressure.