(Bloomberg) -- The risk of debt defaults for British supermarkets surged on Monday as investors reacted to the wild market swings sparked by tax cuts that investors fear will fuel inflation.

Insurance on bonds of UK supermarkets Asda Group Ltd. and Iceland Foods Ltd. -- used to protect investors against non-payment -- jumped to signal a 52% and 76% chance of a default within five years respectively. For Asda, that marks the highest on record, with Iceland just shy of an all-time high set when the pandemic struck.

British supermarkets have already been hit hard by rising costs and Brexit-related supply chain shocks, while a cost-of-living crisis threatens to squeeze British household budgets. Fears of soaring inflation were stoked further on Friday by the UK government’s plans to cut taxes and ramp up borrowing.

Investors are factoring in a 60% chance that Iceland will default on its bonds withing three years, the figures from ICE Data Services show. 

UK bonds plunged across the board on Monday, sending 30-year gilt yields heading for the biggest surge ever. The pound plummeted to a record low on the prospect of more fiscal stimulus, before paring the decline amid speculation the Bank of England will respond to the sharp moves in markets with more aggressive rate hikes.

Read More: Pound Bounces From Record With Traders Turning Sights to BOE

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