France's 10-year yield reaches an 18-year high ahead of the 2027 budget fight

What happened

France's 10-year borrowing cost rose to a new 18-year high of about 4.7% on Thursday, more than a full percentage point above Germany's, as strategists warned the 2027 budget fight could topple the government. CNBC saw the 10-year OAT at 4.6696%; Prime Minister Sébastien Lecornu's draft budget, with about €54bn of spending cuts, goes to parliament in early October ahead of a November 17 vote, and euro-zone business activity grew at its fastest pace in nearly three and a half years on Wednesday, keeping money markets pricing at least one more ECB hike by year-end. (CNBC, TradingView)
The UK 10-year gilt yield rose to 5.38% by mid-morning Thursday, close to last week's 19-year high, adding pressure on Chancellor John Healey's budget next month. Analysts say recent rises have wiped out more than half of the £24bn of headroom against Labour's fiscal rules, and Bank of England chief economist Clare Lombardelli said in Warsaw that policy "is increasingly likely to need to tighten if elevated energy prices persist, absent clear evidence of disinflation or weaker activity." (The Guardian)
Germany's 10-year Bund yield reached 3.57% on Thursday, its highest since June 2009, as Berlin's finance agency said it expects record borrowing this year and more next. The Telegraph's live blog put the 30-year gilt at 5.87%, near its highest since 1998; CNBC's tracker had the Bund at 3.598% at the European close after a 3.615% day high, and the French 10-year OAT at 4.657%, down 5.7 basis points on the day after a 4.719% high, while US yields kept rising. (The Telegraph live blog via Yahoo Finance, CNBC)
Italy's government turned on its statistics bureau ISTAT after the bureau confirmed on Tuesday that the 2025 budget deficit was 3.1% of GDP, just above the EU's 3% limit, leaving Rome in the bloc's excessive-deficit procedure. Prime Minister Giorgia Meloni, who faces a national election next year, said "I don't know whether ISTAT is underestimating Italians or the government's performance", and Economy Minister Giancarlo Giorgetti said its compilation method was "not always compatible with the needs of public accounts"; ISTAT declined to comment on Meloni's remarks and a former director called the attacks a scapegoating of an independent institution. (Reuters via Devdiscourse)
Bank of England Deputy Governor Sarah Breeden, speaking Thursday at the same London Macro Policy Forum where the Federal Reserve's John Williams called a year-end hike "reasonable," said "the more sparks we're throwing in the tinderbox, the more likely we might have to turn the hose on it," adding a second named BoE voice to Deputy Governor Clare Lombardelli's separate warning from Warsaw the same day. Breeden and Lombardelli both voted to hold the BoE's rate at 3.75% last week but "said they were considering shifting position" as elevated energy prices raise the risk that inflation expectations become unanchored. (Reuters, via Euronext syndication)

Sources 7

CNBC cnbc.com high 0.85
TradingView tradingview.com unrated
The Guardian theguardian.com solid 0.75 disputed / split
The Telegraph live blog via Yahoo Finance finance.yahoo.com mixed 0.517
CNBC cnbc.com high 0.85
Reuters via Devdiscourse devdiscourse.com unrated
Reuters, via Euronext syndication live.euronext.com unrated

Credibility ratings combine two public datasets: Lin et al. 2023, PNAS Nexus 2(9):pgad286 (CC BY 4.0) for the domain-quality score, and Wikipedia's perennial-sources list (CC BY-SA 4.0) for the reliability tier. A rating describes an outlet's general record, never this particular article. Unrated means absent from those datasets — not a judgement.

The Projection

France's 10-year yield reaches an 18-year high ahead of the 2027 budget fight

What happened

Sources 7

The wider story