After the ruling Labour Party announced a comprehensive package of tax increases and increased borrowing, the UK bond yields soared on Thursday.

As of local time at 2:13 pm, the 2-year UK government bond yield rose by 18 basis points. Since the Labour Party came into power in early July, the rate has surpassed 4.5% for the first time. The 10-year government bond yield jumped 15 basis points to 4.497%.

Shortly after the announcement of the budget by the UK Chancellor of the Exchequer Rachel Reeves, the yields had already started rising. The budget includes a £40 billion (equivalent to $52 billion) tax increase plan and a commitment to significantly increase borrowing in the coming years.

The trend of yields is opposite to the trend of prices.

Analysts at ING Groep reacted to the rise in yields on Wednesday in a report, stating: "The most noteworthy point at present is how much borrowing is expected to increase in the coming years."

"For some time, we have believed that the government has no choice but to increase actual spending. However, without a doubt, the results delivered are higher than what many people expected just a few weeks ago."

Analysts citing forecasts from the independent Office for Budget Responsibility suggest that over the next 5 fiscal years, UK borrowing is expected to increase by an average of £36 billion per year, considering the time needed for additional tax revenue to materialize.