07/09/2026
The OECD (Organisation for Economic Co-operation and Development) reckons governments and corporations worldwide will borrow $21 trillion from global bond markets in 2026. That's $21,000,000,000,000.00, $5 trillion more than 2024, and double what was borrowed just ten years ago.
For perspective: a million seconds is roughly a week and a half; a billion seconds spans over 31 years; and a trillion seconds reaches back 31,688 years, predating recorded civilisation.
What worries me even more than the sheer scale is the direction of travel. The OECD forecasts that some 50% of that $21 trillion will go purely to refinancing existing debt. Governments almost never repay the principal. When a bond matures, they simply issue another to redeem the first, then bor-row even more to cover the current deficit and the interest run up by previous administrations.
The whole system holds together only for as long as investors are willing to keep rolling the debt for-ward.
To be clear, $21 trillion is this year's annual borrowing alone, not total outstanding debt. Sovereign and corporate bond markets combined already sit at roughly $115 trillion.
The OECD notes that 30-year yields have climbed sharply across most countries since 2022, push-ing governments and companies toward shorter-dated debt. This lowers the amount of interest payable in the short run but forces borrowers back to market far more frequently. Issue a 30-year gilt and you're insulated from near-term rate moves. Roll short-dated debt instead and you're back at the mercy of whatever the market demands, again and again. A 1% rise looks trivial on paper but applied across trillions in recurring issuance, it swallows hundreds of billions that have to come from somewhere: higher taxes, thinner services, inflation, or yet more borrowing.
Meanwhile the BoE (Bank of England) is running down its own gilt holdings, QT (quantitative tight-ening), the hangover from years of QE (Quantitative Easing). As the BoE steps back, hedge funds, pension funds and foreign investors are left to absorb the growing supply. These buyers are far more sensitive to inflation and political risk, and they'll price that in or walk.
The OECD's advice to member governments is to secure "long-term sustainability." Politicians, watching the polls, thinking in electoral cycles won't touch spending until the bond market forces their hand. Every line of expenditure has a constituency; every reform threatens someone's seat. So instead, they'll raise taxes, lean on the markets, adjust the accounting rules, and blame specula-tors, anything but take responsibility.
Which brings us to this week. UK borrowing costs have risen at one of the fastest paces globally, hitting an 18-year high amid a broader bond rout, piling pressure on Chancellor John Healey ahead of his first budget, the government's third, due on 28 October. The 10-year gilt yield hit 5.2944% on Wednesday, its steepest rise since May. The 20-year cost of borrowing is now at its highest since 1998, a clear signal of market stress. Under normal conditions, short-dated yields run below long-dated ones.
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Lord O'Neill, the former Goldman Sachs economist who turned down a role in Andy Burnham's government said the tone of the Prime Minister's debut speech on Tuesday was the last thing inves-tors wanted to hear.
Higher borrowing costs eat directly into what Burnham and Healey can spend without raising taxes or breaking the fiscal rules left by predecessor Rachel Reeves. Ruth Gregory at Capital Economics puts the damage at £9bn wiped off the Budget headroom, down from nearly £24bn at the spring statement to around £15bn now. Her view is that Healey may be walking straight into the same headroom trap Reeves faced, needing £9bn–£14bn in cuts or tax rises just to restore credibility.
David Aikman at the respected NIESR (National Institute of Economic and Social Research) made the underlying point plainly. Years of heavy borrowing have left Britain exposed to exactly this kind of shock in global markets.
05/09/2026 by Tony Redondo The OECD (Organisation for Economic Co-operation and Development) reckons governments and corporations worldwide will borrow $21 trillion from global bond markets in 2026. That’s $21,000,000,000,000.00, $5 trillion more than 2024, and double what was borrowed just ten ye...
