The UK is set to issue benchmark-sized bonds maturing in January 2056 at its highest borrowing cost since 1998, according to sources cited in the reported issuance details, as a global bond sell-off continues to push gilt yields higher.

Sources said the new January 2056 bond is expected to be issued at a level about 0.75 to 1 basis point above the yield on comparable 2055 bonds. That would make it the highest-yielding bond sale since the UK Debt Management Office was established in 1998.

The sale is expected to be priced later on Tuesday. It increases the £5.9 billion bond first issued in May 2025 at a yield of 5.405%. Meghum Mukhich, a strategist at CIBC Capital Markets, said the latest issuance is expected to raise up to £5 billion.

The backdrop is a broader global bond rout that has raised borrowing costs for governments and tightened fiscal conditions. The move has hit UK government debt particularly hard relative to other major developed markets, with gilt yields hovering near multi-decade highs.

By Tuesday, the yield on 30-year UK bonds was reported at 5.83%, after reaching its highest level since May 1998 last week. The current issuance therefore comes at a time when long-dated funding costs remain under sustained upward pressure rather than during a temporary market dip.

Why It Matters

The UK sale matters beyond the gilt market because sovereign bond yields help set the baseline cost of capital across global markets. When long-dated government borrowing costs rise to multi-decade highs, financing conditions generally become less supportive for equities, credit and crypto alike.

It also underscores that macro pressure is coming from rates and fiscal funding conditions, not only from crypto-specific developments. For digital-asset markets, persistently high yields can compete with speculative capital allocation and keep institutional positioning more sensitive to shifts in the broader interest-rate environment.