UK government borrowing costs have pushed higher again. The 10-year gilt yield was trading at 5.41% on the morning of 11 September, its highest level since 2007. It matters to anyone holding a fixed rate business loan, or about to take one, because fixed rate lending is priced off swap rates, and swap rates tend to follow gilts.
01What actually moved
This has run over several sessions rather than one.
Reuters reported the 10-year yield at 5.295% during trading on 10 September, already the highest since August 2007. It has risen further since. The 30-year yield is at its highest level since at least 1998.
The trigger was oil. Prices rose above $100 a barrel for the first time in six weeks, which lifted borrowing costs globally rather than only here.
On 10 September the Debt Management Office sold £5bn of May 2030 gilts at an average yield of 4.786%. That is the highest for that maturity range since October 2023. Bids totalled £16.2bn, so the debt sold comfortably. It simply cost more.
02What it means for business borrowing
Gilt yields are not business loan rates. They are what it costs the government to borrow, and commercial lending is priced above them.
What they do affect is the cost of fixing. Lenders price fixed rate facilities off swap rates, which move with gilts. A sustained rise tends to feed through to new fixed rate offers over weeks rather than days.
If you are already on a variable rate, none of this changes your payments today. The Bank of England's Bank Rate is still 3.75%, and its next decision is due on 17 September.
03One rate that does not move with the market
Not every rate follows the curve, and the difference is worth knowing if you are early on.
According to the Start Up Loans programme, the Start Up Loans scheme charges a fixed 7.5% a year over one to five years. That figure is set by the programme rather than by the market, so a move in gilt yields does not change it.
For everyone else, the practical point is narrower. A rise in yields is a reason to understand what your current facility actually costs, not a reason to rush. We looked at the gap between headline rates and what businesses really pay in our guide on UK SME loan rates in 2026.
