UK Prime Minister Keir Starmer is stepping down, triggering a leadership race for the Labour Party. Andy Burnham, Mayor of Greater Manchester, is the frontrunner. Investors are closely watching for potential shifts in economic and fiscal policies under the new administration, particularly concerning government spending and the bond market.
UK Prime Minister Keir Starmer is stepping down, triggering a leadership contest for the Labour Party. Andy Burnham, Mayor of Greater Manchester, is the frontrunner. Investors are closely watching for potential shifts in economic and fiscal policies under the new administration, particularly concerning government spending and the bond market.
The article argues that bond markets exert undue influence on British politics, citing concerns about government borrowing costs and the power of "bond vigilantes." It suggests progressive politicians can counter this by understanding market dynamics, scrutinizing the Bank of England's policies, and repurposing pension funds for public investment.
UK gilts and sterling face pressure as investors fear a potential left-leaning prime minister, Andy Burnham, may challenge Keir Starmer's leadership, threatening fiscal discipline and adopting a confrontational stance towards bond markets.
Housing Secretary Steve Reed defends Keir Starmer amid popularity concerns, urging Labour to focus on national change over internal conflicts, as Andy Burnham is tipped for a potential leadership bid.
The UK economy grew 0.6% in Q1 2026, beating expectations, but economists warn of weakening growth ahead due to global conflict and potential leadership battle in the Labour party, which Chancellor Rachel Reeves warns could plunge the UK into chaos.
The UK economy grew 0.6% in Q1 2026, exceeding forecasts, despite the war in Iran. Chancellor Rachel Reeves attributes this to the government's economic plan, while experts warn of weaker growth ahead due to energy price shocks and political instability.
King Charles III presented the UK government's legislative agenda as PM Keir Starmer faces leadership challenges post-poor local election results, with market volatility reflecting political instability.
The UK bond market is experiencing significant volatility, with long-term yields hitting 28-year highs. Investor jitters stem from potential Labour leadership changes and the rising influence of the Reform Party, signaling concerns over future fiscal policy.
Bond yields soar and pound falls against dollar as investors brace for potential Labour leadership changeBusiness live – latest updatesUK politics live – latest updatesLong-term UK borrowing costs soared to the highest level in almost three decades on Tuesday as fears about a change of Labour leadership triggered investor jitters and warnings of further bond market turmoil.With investors worried about potential changes to Labour’s tax and spending plans, the yield – in effect the interest rate – on 30-year government bonds, or gilts hit a high on Tuesday of 5.81%, a rise of 14 basis points and the highest since 1998. Continue reading...
UK bond yields hit highest since 1998 this morning, before easing back as some cabinet ministers voiced support for Keir StarmerPolitics live: Keir Starmer tells cabinet he is not resigning amid growing pressure to stand downStarmer on the brink as cabinet ministers urge him to quitChris Beauchamp, chief market analyst at investing and trading platform IG, says:There is no clear plan for what comes next, but markets are already pricing in a new PM who will open the floodgates on spending despite the UK’s dangerous fiscal situation.Faced with hordes of Labour MPs worried about their re-election chances as Reform surges, a new PM will find it very hard to resist calls to spend more money in order to shore up their embattled party.We could see a blowout in longer-dated gilts if this turns into a dogfight– political, fiscal and inflationary risks will rise.Markets tend to dislike a lack of certainty over who runs a government; the fiscal position is already fragile and likely to become worse should a left-leaning ticket prioritise spending; and that this makes inflation stickier. Continue reading...
Rolling coverage of the latest economic and financial newsStarmer on the brink as cabinet ministers urge him to quitNewsflash: UK government borrowing costs have risen at the start of bond market trading.Political uncertainty is gripping the markets, after Keir Starmer was urged to set out an orderly timetable for his departure ahead of this morning’s cabinet meeting.The market’s main concern here, and the reason for this Gilt underperformance, is twofold – firstly, that a new PM would shift to the left, and loosen/scrap the UK’s current fiscal rules; and, secondly, that doing so would exacerbate the UK’s inflation problem.With political uncertainty likely to persist for a while, and the fiscal rhetoric only set to ramp up, those considering buying the dip in Gilts may be minded to wait a while. Continue reading...
Bond yields creep higher on concerns about potential for political instability and rising inflationBusiness live – latest updatesUK politics live – latest updatesThe cost of government borrowing has crept higher as Keir Starmer’s crucial speech failed to dispel investor “jitters” in the bond markets over political instability combined with fears of rising inflation.The yield, effectively the interest rate, on the benchmark 10-year UK government bonds (known as gilts) rose eight basis points (or 0.08 of a percentage point) to 5% on Monday. Continue reading...
Rolling coverage of the latest economic and financial newsUK goverment borrowing costs have risen at the start of trading, lifted by inflation concerns and uncertainty over Keir Starmer’s future.The yield, or interest rate, on UK 30-year bonds is up around six basis points (0.06 of a percentage point) at 5.63%.The triggering of a leadership election, and a subsequent change in Prime Minister, leaves the GBP [the pound] and Gilts [UK government bonds] not only grappling with a ratcheting up of political uncertainty, but also being forced to face up to a likely more left-wing successor to Starmer.Such an outcome would, in all likelihood, lead to a substantial loosening of the ‘fiscal rules’, along with considerably higher government spending, and even higher taxes, possibly even including a manifesto breach in raising NI, VAT, or income tax. Continue reading...
Rise in bond yields due to fuel prices and stability concerns will eat away at Rachel Reeves’s fiscal headroomBusiness live – latest updatesThe UK government’s long-term borrowing costs have hit their highest level since 1998, amid rising fuel prices and concerns about political stability.The yield – effectively the interest rate – on 30-year UK government bonds (gilts) hit 5.76% at lunchtime on Tuesday, up 0.11 percentage points – exceeding the 27-year high reached last autumn. Continue reading...
