Yield on 30-year gilts highest since 1998 as rout triggered by global factors underlines tricky backdrop John Healey faces

• Business live – latest updates

The chancellor’s headroom against Labour’s fiscal rules could be almost halved at his first budget if the current global bond sell-off persists into the autumn, economists say.

The UK’s long-term borrowing costs jumped to their highest level since early 1998 on Tuesday as investors dumped government bonds, betting on higher inflation.