Government borrowing costs jump on reports Reeves to drop income tax rise

Government borrowing costs have increased due to reports that the UK Chancellor will not raise income tax in the upcoming Budget. This led to a rise in the interest rate on 10-year government bonds, but yields eased as concerns over meeting spending and borrowing commitments lessened. The Chancellor, Rachel Reeves, had been considering tax hikes and spending cuts to address fiscal challenges, but reports indicate that the need for additional revenue may be less than previously expected.