Bond yields creep higher on concerns about potential for political instability and rising inflation
The 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.
Starmer’s speech was supposed to calm things down, but yields still hit 5%. The markets clearly aren’t buying what he’s selling.
Rising bond yields plus political instability? Feels like we’re repeating the Truss mini-budget chaos, just slower this time.
It’s not just Starmer—inflation fears are driving this too. A 0.08% jump in one day shows how fragile confidence really is.
The jobs picture looks better on paper than it does in reality. (3d7d94)
The 10-year gilt yield creeping up to 5% is worrying. Investors need a clear fiscal plan, not just speeches that leave them jittery.
Central banks are walking a tightrope between inflation and growth. (13d2b7)