British government borrowing costs have hit their highest level since the 2008 financial crisis, due to rising inflation risks and a growing probability of interest rate hikes later this year. The rise in borrowing costs has been attributed to the escalation of the Iran war, which has led to a surge in oil and gas prices. The 10-year gilt yield has risen by around 9 basis points to 4.933%, its highest since 2008. The Bank of England (BOE) has kept its key interest rate at 4.25% by the end of the year, suggesting a minimum of two rate hikes. Nigel Green, CEO of financial advisory deVere Group, said markets were rapidly unwinding expectations of rate cuts from the bank. The bond market has largely supported Finance Minister Rachel Reeves' commitment to fiscal stability and credibility, but higher yields quickly translate into higher borrowing costs.