"The yield on the benchmark 10-year UK government bond rose by as much as 0.08 percentage points to nearly 4.6 per cent, while yields on 30-year gilts reached their steepest level since November. Bond yields move inversely to prices, meaning the rise reflected a sell-off in gilts. The move came after Anas Sarwar, leader of the Scottish Labour Party, publicly called on Starmer to step down, triggering speculation over the prime minister's future."
"One name increasingly discussed by traders is Angela Rayner, who is seen as sitting to the left of Starmer. Although Rayner was among senior Labour figures to publicly back the prime minister, her potential ascent has unsettled investors wary of a change in fiscal direction. Wes Streeting, associated with Labour's more centrist wing, is also viewed as a possible contender in any future leadership race."
UK government borrowing costs rose as investors priced heightened political risk after pressure on Keir Starmer. The 10-year gilt yield climbed 0.08 percentage points to nearly 4.6% and 30-year yields hit their highest level since November, reflecting a gilt sell-off. The move followed Anas Sarwar's call for Starmer to step down; yields later eased after cabinet ministers rallied behind him. Sterling strengthened 0.4% against the dollar to $1.36 and slipped 0.26% against the euro to €1.14, while the FTSE 100 rose 0.16%. Investors feared a leftward policy pivot or leadership contest elevating Angela Rayner or Wes Streeting. Kathleen Brooks said a political risk premium was being built into UK asset prices.
Read at Business Matters
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