Governments generally spend more than they raise in tax so they borrow money to fill the gap, usually by selling bonds to investors. As well as eventually paying back the value of the bond, governments pay interest at regular intervals so investors receive a stream of future payments.

U.K. borrowing costs remained elevated early Friday but off multiyear highs reached in Thursday’s session, after government officials sought to reassure investors that bond-market operations remain orderly and reflect a recent jump in yields globally.

Economists have warned the rise could ultimately mean further tax rises or cuts to spending plans.

Britain's government borrowing costs have leapt this week, adding to the challenges facing finance minister Rachel Reeves who is planning to sell hundreds of billions of pounds' worth of bonds this year to fund public services and growth-boosting investments.