Australia's 10-year government bond yield climbed to 5.16 per cent on Tuesday, the highest level since April 2011, as markets sell off bonds amid inflation concerns. The rise reflects both global bond market weakness and local inflation worries, according to ABC reporting.

AMP chief economist Shane Oliver said the higher borrowing costs mean less money for government services and harder conditions for new home buyers. "Rising interest costs on public debt means less money left over for government services, raising corporate borrowing costs and higher fixed mortgage rates," Dr Oliver said. The three-year bond yield jumped 0.07 percentage points to 4.73 per cent.

The Australian sell-off is part of a global phenomenon. Japan's 10-year government bond yield rose to 3 per cent on Tuesday, its highest since September 1996. British and US government bond yields have also surged, with the US 30-year Treasury bond yield reaching 5.2 per cent for the first time in 19 years, David Taylor reports for ABC business (AU).