UK gilt yields hit 17-year highs at 5.29%, threatening fiscal headroom

UK 10-year gilt yields surged 7 basis points to 5.29%—the highest since August 2007—extending a broader bond selloff. The spike threatens the government's £12 billion fiscal headroom against budget rules, potentially forcing spending cuts. GBP/USD and GBP crosses face pressure as higher UK borrowing costs weigh on growth outlook and rate expectations.