When gilt yields suddenly jump, which part of Britain’s debt gets more expensive first?
Answer: C. New debt and debt being refinanced
Explanation: Bond yields are often reported as though a rise suddenly makes Britain’s entire debt pile more expensive. But that’s not how most conventional gilts work.
Most have a fixed coupon, so when market yields rise, the government doesn’t suddenly start paying a higher rate on every existing bond. The higher cost feeds through mainly when the government issues new gilts or refinances debt that matures.