Nigeria may see a slowdown in remittance inflows from the United Kingdom as its borrowing costs have climbed to their highest level in nearly three decades, while the pound has suffered its sharpest one-day drop in almost three months.
This represents a double blow that could reshape the financial lives of millions, including Nigerians living in the United Kingdom.
The yield or interest rate on 30-year UK government debt hit 5.680 per cent yesterday morning, which represents the highest level since 1998, indicating that it will cost the UK more to borrow from markets above the previous 27 year high of 5.649 per cent set in April.
Yields, which rise when a bond’s price falls, are a measure of the interest rate that investors demand when lending to a government or company.
The surge in yields on government bonds, which serve as a benchmark for everything from mortgages to personal loans, reflects investors’ expectations that the Bank of England will keep interest rates elevated for longer in its fight against stubborn inflation.
