UK government bonds weaken as Starmer fights for premiership
UK government bonds weakened on Monday as political uncertainty mounted over Prime Minister Keir Starmer's leadership. The yield on the 10-year gilt rose 8 basis points to 4.52%, while the pound fell 0.6% against the dollar. The sell-off comes amid reports of a potential leadership challenge within the Labour Party.
UK government bonds weakened on Monday as political uncertainty mounted over Prime Minister Keir Starmer's leadership. The yield on the 10-year gilt rose 8 basis points to 4.52%, while the pound fell 0.6% against the dollar. The sell-off comes amid reports of a potential leadership challenge within the Labour Party.
The moves mark a reversal from May 8, when UK borrowing costs fell and the pound rose after Starmer vowed to remain prime minister following Labour's losses in local elections. By May 10, reports emerged that Starmer faced a growing leadership challenge after those losses, and Monday's bond sell-off reflected deepening political uncertainty.
Investors cited the lack of clarity over Starmer's future as a factor in the gilt sell-off. The 8-basis-point rise in the 10-year yield pushed the benchmark rate to its highest level in weeks, while sterling's 0.6% decline against the dollar added to pressure on UK assets.