The Government has borrowed at its highest interest rate since the depths of the financial crisis as its debt interest bill is sent soaring by the market turmoil.

Some £900m of index-linked gilts were sold by the Debt Management Office at a yield of 1.55pc, the highest level since October 2008.

These inflation-tied gilts, also known as linkers, were at the heart of the turmoil on UK debt markets on Monday, forcing the Bank of England to intervene this morning. Threadneedle Street widened its bond purchases to linkers, warning of the threat of a “fire sale” in the wake of the market-rattling mini-Budget.

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