Monday 18 May 2026 6:28 am
| Updated:
Monday 18 May 2026 12:30 pm
Starmer’s premiership is in the hot seat.
Welcome back to the City AM liveblog.
The bond market is taking a breathe after mountains of pressure on Friday.
The UK’s borrowing costs hit their highest since 2008, charging to 5.17 per cent during one part of the day’s trading session. This was topped once more on Monday morning, but since then yields have eased back slightly and sterling is rallying against the pound.
Friday’s woes came as inflationary warnings from the Iran war renewed, whilst the UK faced a specific political premium over fears of a change in Prime Minister to someone with looser fiscal policies.
Manchester Mayor Andy Burnham is viewed as one of the top candidates to loosen the Treasury’s purse strings and he launched his bid to return to Parliament on Thursday, rattling the market.
The pound fell 0.3 per cent against the dollar to around $1.336 on Friday, following another steep fall on Thursday after Burnham’s announcement.
“Pressure continues to build on Prime Minister Keir Starmer following Labour’s poor local election performance and his dismal ‘reset’ speech…” David Morrison, senior market analyst at Trade Nation, said.
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Bank of England Live: Interest rates held as hawks warn of ‘highly uncertain’ energy prices
“The UK gilts market remains sensitive to the possibility of a more left-leaning leadership approach that could result in increased borrowing and public spending.”
Elsewhere, the stalemate in the Middle East is set to come to a head after President Donald Trump warned the “clock is ticking” on talks to end the war with Iran.
“They better get moving, FAST, or there won’t be anything left of them,” the President wrote on Truth Social.
“TIME IS OF THE ESSENCE!”
The message was a stark call back to Trump’s threat that a “whole civilisation” would die unless Iran agreed to a peace deal. This came shortly before the announced peace deal in April, but efforts since then have since waned.
We’ll be bringing you all the latest on this and more.
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FTSE 100 Live: Dow Jones joins City in red; Oil soars on Iran war fears
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