Bank of England Governor Bailey said weak productivity and other shocks are
among the drivers of rising public debt in advanced economies, and that higher
public debt in turn is raising borrowing costs. He described the situation as a
very, very severe structural challenge and cited population ageing and pressure
to increase defense spending as additional factors. Government bond yields have
rose sharply in recent months; earlier this week the UK 10-year gilt yield hit
a near 20-year high and long-dated gilt yields reached levels not seen since
1998.
