While the rise is far from the violent lurch seen after the Liz Truss mini-Budget, economists and City chiefs have been left speculating whether the gilt market is close to breaking point.

We’ve seen bond markets break countries before.

During the eurozone crisis, when Greek, Irish and Portuguese government debt yields approached 7pc, those countries had to seek bailouts from the International Monetary Fund (IMF) as market borrowing became unviable.

Jim Reid at Deutsche Bank notes that while everyone knows about the UK’s exposure to volatile markets, deeper fundamentals are also at play.

The UK has long relied on foreign money to fund itself, running what’s known as a negative net international investment position, meaning overseas investors own more British assets than the other way around.

That leaves the UK more vulnerable to rising borrowing costs and a collapse in sterling if those investors lose confidence – although recent research from the Bank of England suggests that, stripping out foreign direct investment, the position has been relatively stable since the 2016 Brexit vote.

“It’s [the UK] reliant on the kindness of strangers and [it] has limited buffers against external shocks,” Reid said in a note to clients.

Simon French, the chief UK economist at Panmure Liberum, says a vulnerable economy and rising borrowing costs do not mean Britain is on course for a bailout.

Firstly, Britain controls its own currency, which means it always has a buyer of last resort in the Bank of England. It also means Britain cannot technically run out of pounds in the same way eurozone governments ran out of euros, because the central bank can always print more.

But that doesn’t mean it’s a good idea. “You’d pay a cost in terms of inflation and currency devaluation,” says French. “So it’s more a slow death of a productive economy than a crash moment.”

Could the Bank intervene?

French also believes there is a psychologically important threshold at which the Bank of England may have to step in to buy UK debt.

He argues that gilt yields are already approaching levels that have previously triggered market stress, with long-term borrowing costs now back around 5pc. But unlike the dramatic move after Truss, he notes this rise has happened more gradually, making it harder to justify emergency intervention on financial stability grounds.

Andrew Bailey highlighted this tricky trade-off in a speech last month in New York, noting that “there is more scope for conflict between the public good interest and private interests” in the pursuit of financial stability, making it harder for policymakers to make that judgement call.

However, French insists that this steady lurch upwards cannot continue forever.

“If the 10-year were to hit 5.5pc, the pressure would become very, very significant for the Bank to act,” he adds. While that would take yields to their highest level since the turn of the millennium, they are only just over half a percentage point away from that level now (4.9pc).

Others believe there are several steps towards this point, including further downgrades of UK debt that would force money managers to remove gilts from their portfolios.

This could make it more difficult for the Debt Management Office (DMO) to sell UK debt and ultimately lead to a failure of Bank of England intervention to calm markets.

The UK is paying around £100bn a year to service its debt – that’s the equivalent of almost 8pc of all government revenues.

Ratings agency Fitch said this was more than double the average for countries with a similar credit rating of 3.7pc, and much higher than for countries including France and Germany.

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