The European bond market is falling apart

On 1 September, inflation in the euro area accelerated to its highest level in nearly three years, further reinforcing the European Central Bank ' s rationale for next week ' s interest rate hike. With interest-rate hikes in the air, the rate of return on long-debts in Europe has been high for many years: France's 10-year bond return has reached 4.23 per cent, the highest since 2008; Germany's 10-year bond return has reached 3.31 per cent, the highest since 2011; Portugal's 10-year bond return has reached 3.665 per cent, the highest since 2023; Italy's 10-year bond return has reached 4.15 per cent, the highest since 2024; and the United Kingdom's 10-year bond return has reached 5.223 per cent, the highest since June 2008. The United Kingdom ' s 30-year sovereign debt return rose to 5.88 per cent, the highest since 1998。