Why are UK borrowing costs rising and what does it mean for me?

The government's ability to play with the public finances is limited by the so-called fiscal rules it has set for itself. So, if it needs more money to pay back higher borrowing costs, it has less to spend on other things (under its self-imposed rules).The possibility now looms of less support for households struggling with the cost of living, or of tax rises to pay for any support.Importantly, these are choices – not certainties – so the chancellor might free up some money by spending less elsewhere.Some may be wondering about the impact of higher gilt yields on the mortgage market, particularly after what followed Liz Truss's mini-Budget in September 2022.Analysts believe that mortgage rates could go up on new fixed deals, as funding costs for lenders rise. But this is very different to 2022, when they shot up over a couple of days. That speedy rise led to lenders quickly pulling deals while they tried to work out what interest rate to charge.However, the market could be more favourable to anyone currently buying an annuity - a product from an insurance company that gives a retirement income for the rest of their life, bought only once.