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UK government borrowing costs rose on Friday but remained below Thursday’s peak as investors awaited a key US jobs report later in the day.

The 10-year gilt yield rose 0.03 percentage points to 4.84 percent but was still below the 4.93 percent level touched on Thursday, which was the highest since 2008. Yields moved inversely to prices.

Sterling eased against the dollar, falling 0.2 percent to $1.229.

Gilts have suffered in recent sessions amid a global rise in government bond yields driven by sticky inflation in some major economies.

Analysts said closely watched US jobs data for December, due later on Friday, will help drive the direction of bond yields, including gilts.

The UK has been hit hard by global sales as investors worry about heavy government borrowing needs and the growing threat of stagflation, which combines anemic growth with continued price pressures. .

The credibility of the government’s economic plans will be weakened by bond market strains after Chancellor Rachel Reeves gave up her own £9.9bn headroom against her revised fiscal rules in last year’s Autumn Budget.

Increases in gilt yields have since put that budget wriggle room under threat. The level of bond yields is an important determinant of budget headroom, given its implications for the government’s interest bill, which exceeds £100bn a year.

Labor sought to reassure investors this week, with Darren Jones, the UK Treasury’s number two, telling MPs on Thursday that the government was committed to “economic stability and sound public finances”.