UK bond yields jumped to their highest level since 1998 on Monday morning before easing back later in the day, as Keir Starmer told his cabinet he was not resigning and several ministers moved quickly to back him. The 30-year yield reached 5.81% in early trading, while the 10-year yield climbed to 5.13% before both pulled back by noon.
By midday, the 30-year bond yield was 9 basis points higher at 5.76%, and the 10-year yield was just below 5.1%, leaving government borrowing costs elevated even after the sharpest pressure had passed. Peter Kyle, the business secretary, Liz Kendall, the technology secretary, and Steve Reed, the housing secretary, all told reporters after the meeting that they were supporting Starmer.
The move in the bond market came as the prime minister faced open pressure to stand aside, but the immediate market reaction was being driven by more than Westminster. Brent crude rose almost $4 a barrel to $108.17 a barrel as hopes faded for an imminent US-Iran peace deal, adding to the sense of strain across markets.
Shares were weaker too, though London held up better than its European peers. The FTSE 100 fell 0.35%, while France’s CAC dropped 0.7% and Germany’s DAX lost 1.1%, leaving the 148-year-old UK benchmark ahead of its continental rivals despite the political turmoil. The question now is less whether the market noticed the crisis than how long government borrowing costs can stay this high if the political pressure does not ease.
