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Financial Markets - Which Countries have the Highest Government Bond Yields?

Geoff Riley

1st October 2022

This video short looks at September 2022 data to see which of the major countries has the highest yields on 10-year government bonds.

There has been much discussion in recent days and weeks about the rising cost of borrowing for the UK government when it seeks to finance their fiscal (budget) deficit. The yield on bonds has climbed sharply and is - in some cases - above that of Italy and Greece, two countries who suffered a fiscal crisis in the wake of the Global Financial Crisis.

Bond yields represent the amount of money an investor receives for owning government debt as a percentage of its current price. When the price of a bond falls, yields rise. The yield on a bond is effectively the cost of borrowing for the government.

Main risks from owning bonds are:

  1. Inflation risk: Inflation erodes the real value of bonds when repaid
  2. Currency risk – from an exchange rate depreciation
  3. Default risk – when a government is unable to repay some of all the debt

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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