UK long-term borrowing costs dip from 28-year high after Starmer allies back PM – business live

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...