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When gilt yields suddenly jump, which part of Britain’s debt gets more expensive first?

  • A. Every gilt already in existence 106 votes (21.0%)
  • B. Only debt held by foreign investors 87 votes (17.2%)
  • C. New debt and debt being refinanced 221 votes (43.8%)
  • D. Every government loan immediately 91 votes (18.0%)

Total votes: 505

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.