10-year UK borrowing costs hit 3%

<p>The ten-year UK borrowing cost is up to three per cent.</p>

The UK's ten-year borrowing cost has reached three per cent, suggesting economic stimulus could be withdrawn by the US Federal Reserve in the near future.

It is the first time this rate has gone to three per cent or above in more than two years, indicating the UK economy may be growing at a faster rate than had been anticipated.

The Office for National Statistics announced the economy expanded by 0.6 per cent in the second quarter of the year, but later upwardly revised this figure to 0.7 per cent.

Commenting on the ten-year borrowing costs, the BBC's business editor Robert Peston described it as a "very important" interest rate.

"It tells you not only the interest rate which the government – with its huge debts – has to pay for new borrowing, but it is an important benchmark for the borrowing costs paid by businesses and consumers," he said.

Earlier in the week, the Bank of England's Monetary Policy Committee announced that the base rate for interest would be held at 0.5 per cent – a record low for the UK – for yet another month.

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