Since the Iran war broke out on 28 February, Britain, Italy and France — the new 'Bifs' — have seen their 10-year government borrowing costs rise by 0.45 to 0.5 percentage points, more than any other major European country. Investors are punishing the trio hardest because they combine already-stretched debt-to-GDP ratios with upcoming spending pressure on defence and energy independence. The UK priced a record £15bn syndication at 4.91%, the highest on a 10-year sale since 2008.
'Bifs' replace 'Piigs' as Europe's bond market whipping boys
— Summary
The story in one line: Since the Iran war broke out on 28 February, Britain, Italy and France (“the Bifs”) have seen their government borrowing costs rise more than any other major European country, because investors think they are the least able to pay for higher defence and energy bills.
Key numbers
- 10-year borrowing rates (yields): UK and Italy +0.5 percentage points (pp) since the war began; France +0.45 pp; Germany +0.38 pp.
- The UK raised a record £15 bn of debt on Tuesday at a 4.91% yield — the highest on a 10-year sale since 2008. Current 10-year UK rate: ~4.8% (peaked near 5.12% last month).
- France’s 10-year rate hit almost 3.89% last month, its highest since 2009.
- The UK–Italy bond correlation has reached its highest level in decades.
Why it matters
“Yield” is just the interest rate a government pays to borrow. When yields rise, every new euro or pound of debt costs more — squeezing budgets. The three “Bifs” already had stretched debt-to-GDP ratios before the war, so markets are punishing them hardest for any new spending plans on weapons or energy independence. The name echoes the old “Piigs” (Portugal, Ireland, Italy, Greece, Spain) crisis of the 2010s. Political instability in the UK (since the 2022 “gilts crisis”) and France (recent political turmoil, wide deficit) amplifies the pressure.
Takeaway
Europe’s three big “weak borrowers” are now being lumped together by bond investors. More debt is coming (defence, energy) at the worst possible moment.
Source: Financial Times, 15 April 2026 — Ian Smith and Jonathan Vincent.
— Delfineo's Take
The real signal isn't the absolute yield move — it's that UK gilts and Italian BTPs now correlate at their highest level in decades. Bond investors have started treating the two countries as a single fiscal vulnerability trade, echoing the Piigs grouping of the 2010s. France, once firmly in the 'core', is being pulled into the same basket. For European equity valuations, this means a higher discount rate for longer, regardless of what the ECB does.