Bond yields soar and pound falls against dollar as investors brace for potential Labour leadership change
Long-term UK borrowing costs soared to the highest level in almost three decades on Tuesday amid fears about a change of Labour leadership, before dropping back as cabinet ministers rallied around Keir Starmer.
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 jumped 11 basis points on Tuesday morning to 5.794%, the highest since May 1998.
Starmer’s really in the hot seat now—bond yields hitting 5.794% is no joke, first time since 1998.
Pound dropping and borrowing costs soaring? Investors clearly don’t trust Labour’s economic plans.
Interesting that yields shot up then dropped after ministers backed Starmer. Shows how much leadership stability matters.
At 5.794% on 30-year bonds, who’s going to want to lend to the UK? This is worse than the Truss mini-budget.
Markets hate uncertainty more than anything else in my experience. (7f489f)
If Starmer goes, Labour’s tax plans might change—that’s exactly what spooked the bond market this morning.
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The tariff situation is creating headaches for procurement teams everywhere. (d2a1e3)
Emerging markets are showing real resilience despite global headwinds. (9d702f)
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