Experts assert that the increase in UK borrowing costs is not a replication of the 'mini-budget' crisis, despite similarities.

• Since Wednesday, the borrowing costs in the U.K. have increased as investors analyze the budget's borrowing and tax hikes announced by the Labour government.
• Analysts dismissed the idea that the U.K. was facing a "mini-budget" crisis in 2022, as bond yields rose rapidly and threatened to destabilize pension funds.

The British bond market experienced a two-day increase in borrowing costs following the Labour government's announcement of a large borrowing and tax increase package in its Wednesday budget. However, analysts dismissed the possibility of a second "mini-budget" crisis.

The medium-term borrowing costs for the government were slightly lower at 11:20 a.m. London time, reaching 4.431%, up from around 4.3% ahead of Wednesday's budget. The had risen from around 4.2% on Wednesday to 4.415% in the Friday session.

As bond yields rise, it indicates a sell-off in bonds and a decrease in appetite for funding U.K. debt.

On Wednesday, Finance Minister Rachel Reeves announced a higher increase in short-term borrowing than expected, along with around £40 billion in tax hikes. Reeves stated that these measures were necessary to achieve a day-to-day spending balance while investing in public services and infrastructure. Many of her plans were already known to the public, allowing markets to prepare for their impact.

Despite recent improvements in macroeconomic conditions, such as the decrease in inflation, traders are still cautious due to the U.K.'s history of volatile bond movements. The announcement by former Prime Minister Liz Truss in autumn 2022 of a massive increase in borrowing to fund tax cuts without prior warning caused a rapid increase in bond yields, which threatened to destabilize pension funds.

Some economists predict that the fiscal expansion announced by Reeves will result in slightly higher inflation and a slower pace of interest rate cuts from the Bank of England, while others believe the BOE will ease monetary policy at the same rate due to lowering levels of services inflation.

The Office for Budget Responsibility has raised its near-term U.K. growth outlook but lowered its longer-term projection in a five-year forecast released Wednesday, sparking debate about the effectiveness of the Labour government's policies in boosting economic growth.

According to Deutsche Bank strategists, the budget is unlikely to provide significant growth benefits until after the five-year timeline, despite a near-term boost.

According to Susannah Streeter, the increase in the risk premium for U.K. debt is not solely due to investor concerns about an inflationary budget.

The concern about where the extra investment spending will go and how responsible the government will be in using that money has returned to some extent on the UK, as Streeter told CNBC's "Squawk Box Europe" on Friday.

"The Trussonomics mini-budget spike was not like anything we saw when the unfunded tax cuts were implemented," she continued.

"Will the government exercise prudence in executing its strategy, given the significant tax and spending budget, which may lead to extra weariness? This is what bond investors are looking for."

Despite the decline in the British pound against the U.S. dollar and euro following the Truss mini-budget, sterling remained relatively stable, trading at $1.207 on Friday morning.

Mohit Kumar, chief financial economist for Europe at Jefferies, stated on CNBC that the market has reason to be concerned about the U.K. fiscal outlook.

"An expansionary budget has been implemented, with £70 billion in spending funded by tax raises. However, there is concern among think tanks about whether the tax increases will provide as much money as expected, as it is not clear."

"The fiscal side of the U.S. elections is a concern for the market, as global investors worry about the fiscal deficit and issuance."

This week's bond market movements were influenced by technical factors, as well as a decline in "steepener trades" on the U.K., where investors make profits from rising long-term yields compared to short-term yields.

"If inflation is lower, growth is lower, the Bank of England may need to cut more aggressively," Kumar said.

He stated that although a prolonged decline in bond sales could pose a threat, he did not anticipate a reoccurrence of the 2022 mini-budget.

Kumar stated that the move was "very technical in nature" when liability-driven investments were sensitive to the long-end of the curve. He added, "We think we are at least 100 basis points away from that."

If we get a Republican sweep in the upcoming U.S. election and more fiscal concerns, the bond market could still move higher in yields, as he added.

— CNBC's Sam Meredith contributed to this story