LONDON, Sept. 1 (Xinhua) -- Britain's long-term government bond yields rose sharply on Tuesday, with the 30-year gilt yield climbing to around 5.9 percent, its highest level since 1998, as a global bond sell-off combined with higher energy prices and renewed concerns over inflation and public finances.
The yield on the benchmark 10-year gilt rose to around 5.25 percent at one point, its highest level since the 2008 global financial crisis, before closing at 5.21 percent. The 30-year gilt yield later ended the session at 5.85 percent.
The moves came amid a broader sell-off in global bond markets, with government bond yields also rising in the United States, Germany and Japan.
Market analysts said renewed tensions in the Middle East had pushed up international energy prices, reviving concerns that inflation could remain elevated for longer and prompting investors to reassess the outlook for monetary policy in major economies.
Bond markets have also been weighed down by concerns over high public debt and substantial government borrowing needs in several major economies, as investors demand higher returns to hold longer-dated debt.
In Britain, domestic inflation and fiscal concerns have added to the pressure on gilts.
Data released by the British Retail Consortium on Tuesday showed that shop prices rose 1.5 percent year-on-year in August, accelerating from 0.9 percent in July and marking the fastest increase in more than two years.
Food prices increased 2.8 percent, while non-food prices rose 0.9 percent. The industry body said higher energy, raw material and commodity costs were increasingly being passed on to consumers.
Britain's fiscal position has also remained under close market scrutiny. Data from the Office for National Statistics showed that public sector net borrowing stood at 1.8 billion pounds (2.4 billion U.S. dollars) in July, 700 million pounds higher than a year earlier.
From April to July, cumulative public sector net borrowing reached 56.7 billion pounds, 6 billion pounds lower than the same period last year but still 2.3 billion pounds above the level forecast by the Office for Budget Responsibility.
The British government is due to present a new budget on Oct. 28. Prime Minister Andy Burnham's government is seeking to roll out a series of measures aimed at boosting investment and easing cost-of-living pressures.
Market participants are widely concerned that higher gilt yields could further increase the government's financing and debt-servicing costs, adding to the challenge of balancing additional spending with efforts to keep the public finances on a sustainable path.
