Belgium’s 10-year government bond yield rose above 4% on Wednesday, reaching its highest level since January 2012.
The increase came as a sustained sell-off in bond markets pushed borrowing costs higher.
Investors are increasingly concerned that inflation could keep rising because of the conflict in the Middle East and higher oil prices. That, in turn, could force central banks to raise their key interest rates further, making investors less willing to commit their money for the long term.
Higher long-term interest rates make borrowing on financial markets more expensive, adding pressure to the state’s finances. The 10-year yield also affects mortgage lending, meaning home loans could become more expensive as well.
Long-term interest rates have also risen in several other countries.
Germany’s benchmark 10-year Bund yield stood at 3.42%, its highest level since 2011, while the French 10-year yield reached 4.3% and the UK equivalent was about 5.2%.
