UK Bond Market Tumbles as Starmer's Political Crisis Weakens Sterling and Gilts
Long-term bond yields in the UK rose to nearly 3-decade highs as Prime Minister Keir Starmer faces mounting pressure to resign following election losses. The gilt selloff signals growing investor concern about Britain's fiscal trajectory and political uncertainty.
Gilt Rout Reflects Political Risk
The UK bond market tumbled, driving long-term bond yields back to the highest in nearly three decades, as speculation over Keir Starmer's future as prime minister renewed concern about the weakened state of Britain's finances.
Political Uncertainty and Economic Weakness
The selloff in gilts reflects broader economic concerns in the UK, where Goldman Sachs Research expects another mixed year for the UK economy in 2026, characterised by trend-like growth and further increases in unemployment, but also materially lower inflation and three more Bank Rate cuts to 3%.