Debt-funded spending in Treasurer Jim Chalmers’ first budget will be the most expensive in almost a decade, as surging interest rates globally drive bond yields to long-run highs and some record levels.

The three-year government bond yield has surged from 2.9 per cent to 3.6 per cent since the beginning of August, while the 10-year yield hit 4.1 per cent on Monday, the highest level since 2014.