British government bond yields rose at the start of Thursday's session, following comments by new Finance Minister John Healey expressing concern about the costs of doing business and rising living costs.

This comes as the new finance minister seeks to establish the government's fiscal credibility after resigning from his defense post due to disputes over spending.

The yield on 10-year bonds reached 5.0862%, its highest since May 20, after rising by up to 5 basis points at 07:13 GMT according to Reuters.

Yields on 30-year bonds, which are highly sensitive to fiscal risks, touched their highest since May 19 at 5.7775 percent.

Healey emphasized his commitment to fiscal discipline, saying "Fiscal credibility is the bedrock of economic stability, just as it is for national security" at a Bloomberg event.

Healey had resigned from his post as defense minister in the previous government due to disagreements over spending on the armed forces.

He added: 'The Prime Minister and I have discussed how to work closely to ensure compliance with fiscal rules, while maintaining a safety margin to address uncertainty.'

Short-term bond yields rose, with the two-year yield increasing by 4 basis points to 4.4729% and the five-year yield by the same amount to 4.656% at 07:45 GMT.

British interest rate futures pointed to expectations of a tightening of monetary policy by the Bank of England by about 48 basis points by December, close to fully pricing in two potential rate hikes of 25 basis points each, compared with around 40 basis points on Wednesday.

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These moves reflect market sensitivity to any signals regarding fiscal policy and inflation, especially with expectations of interest rate hikes. Futures indicated the possibility of two rate increases of 25 basis points each by December, putting pressure on short-term bond yields. Notably, Healey had resigned as defense minister in the previous government over disputes about military spending, adding a political dimension to his assertions of fiscal discipline. The question remains as to how the government can balance boosting investment and meeting strict fiscal rules.