The surge in US and UK government bond yields threatens to complicate the efforts of central bankers to create a sustained economic recovery from a deep recession.

Late on Monday in New York, the yield on the 10-year Treasury hit a seven-month high of 3.91 per cent, while the two-year yield climbed to 1.43 per cent, continuing the strong rises that took place on Friday after the latest US jobless data proved better than expected. In the UK, the yield on the 10-year gilt reached 3.91 per cent, its highest since February 5.