Key events<\/p>\n
UK 10-year gilt yield edges lower as Wes Streeting backs Burnham for prime minister<\/p>\n
Markets are reacting positively t the prospect of an unopposed leadership contest, after Wes Streeting said he was backing Andy Burnham as the next Labour leaders and prime minister.<\/p>\n
The yield on the benchmark 10-year gilt is down 0.02% at 4.82%<\/p>\n
The pound has also edged into positive territory, up 0.06% to \u00a31.324.<\/p>\n
Wes Streeting’s statement backing Andy Burnham as Labour leader. Photograph: Wes Streeting<\/p>\n
In a letter posted on X, Wes Streeting said he has \u201cspoken at length with Andy in recent days\u201d and was convinced there was a place for a raft of ideas he has to \u201cchange our country\u201d, having listed out plans for energy security, a special relationship with Europe.<\/p>\n
Streeting added:<\/p>\n
double quotation markWe could spend the summer exaggerating small differences, or we can roll up our sleeves and help him deliver the change our party and our country needs. that is the choice that I am making and I hope that everyone else will back Andy too.<\/p>\n
Share<\/a>Markets shrug off news of Starmer’s long-anticipated resignation<\/p>\n While markets have largely shrugged off the news of Starmer\u2019s widely expected resignation, ths may not last if there is a more expansive fiscal policy by the next Labour prime minister.<\/p>\n This is why the next leader\u2019s choice of chancellor is key, according Capital Economics deputy chief UK economist Ruth Gregory.<\/p>\n Gregory says:<\/p>\n double quotation markThose on the \u201csoft left\u201d of the Labour Party (Miliband, Haigh) may be more inclined to raise spending and borrowing than those on the \u201csoft right\u201d, who would probably offset any spending rises with spending cuts elsewhere or tax hikes (Streeting, Mahmood, Cooper, McFadden).<\/p>\n Meanwhile, we doubt a new top team would be successful at boosting medium-term economic growth. Other things equal, looser fiscal policy could have a near-term positive effect on GDP.<\/p>\n But that boost is unlikely to be big if it is partly driven by higher defence spending (a lot of the UK\u2019s defence spending goes on imports) and could be partly or wholly offset should higher taxes decrease confidence and\/or raise gilt yields.<\/p>\n The fiscal constraint will be the same, making it hard to boost GDP growth in the medium term.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.57 EDT<\/p>\n The pound has started to pare some losses, and is now trading just 0.08% lower at \u00a31.322.<\/p>\n It comes as Starmer ending months of uncertainty over whether he would stay in post, which has weighed on UK markets.<\/p>\n Share<\/a><\/p>\n Markets seem to be appeased by news of a (relatively) standard leadership contest, which will shake out any policy positions from prospective prime minister before they take post.<\/p>\n That could help reduce any jitters from some corners of the market over Andy Burnham\u2019s potential leadership. according to Richard Carter, head of fixed interest research at Quilter Cheviot.<\/p>\n Carter says:<\/p>\n double quotation markMarkets are wary of Burnham\u2019s previous policy positions so they would prefer to see ideas for governing fleshed out via a leadership contest, keeping surprises to a minimum.<\/p>\n There are difficult decisions around welfare and defence spending lurking, with each likely to have an impact on gilts and wider UK markets.<\/p>\n For now, given the economic team Burham has been putting in place, alongside the fact he does not appear to be seeking a new mandate, we are probably going to see more of a continuation of the current direction from the government.<\/p>\n Cabinet appointees will likely be scrutinised, however, for their growth friendly credentials.<\/p>\n Last week\u2019s borrowing figures highlight just how messy this inheritance will be, and as such, there is unlikely to be any immediate silver bullet to the UK\u2019s economic woes.<\/p>\n Without that new mandate, there is likely to be more tinkering with personal taxation around the edges and as such that will weigh on growth.<\/p>\n Share<\/a><\/p>\n Updated at\u00a005.12 EDT<\/p>\n UK gilt yields are also broadly unchanged, signalling investors have long expected this change at the top of UK government.<\/p>\n The yield on the benchmark \u200c10-year UK gilt is up 1 basis point on the day at 4.85%, unchanged from where they were prior to the announcement.<\/p>\n Share<\/a>Pound holds lower after Starmer confirms resignation<\/p>\n Markets appear to have broadly priced in Keir Starmer\u2019s resignation, with the pound having moved little on the news.<\/p>\n Sterling has pared losses but is still in the red, down 0.2% at \u00a31.32, though part of this is due to a rising US dollar which has gained ground on progress in the US-Iran peace talks.<\/p>\n Starmer has tried to lay out an orderly transition, saying he has asked the national executive of the Labour party to set out a transition timetable, with nominations for new leaders opening 9 July and completed by summer recess on 16 July.<\/p>\n He said that will ensure a new leader in place before parliament returns in September.<\/p>\n Starmer said he will remain in post as prime minister until the context is complete, and promised to give his \u201cfull and unequivocal support\u201d to whoever takes his place.<\/p>\n Share<\/a>Starmer confirms he is resigning<\/p>\n Prime minister Keir Starmer has taken the lectern outside Downing Street listing the progress made by Labour government, before confirmed he is resigning.<\/p>\n double quotation mark\u201cEvery decision I\u2019ve taken has been about putting the country I love, first\u2026that is why I will resign as leader of the Labour party.\u201d<\/p>\n You can follow the play-by-play of Starmer\u2019s resignation address in our Politics live blog here:<\/p>\n Share<\/a>Pound near 2026 low as PM Keir Starmer expected to announce resignation timetable<\/p>\n Sterling is down, trading near its lowest level so far this year, as investors await news of prime minister Keir Starmer\u2019s resignation timetable.<\/p>\n The pound is trading down by about 0.35% at 1.3191, with all eyes on how markets will react to news of what is expected to be a baton pass to Andy Burnham.<\/p>\n Share<\/a><\/p>\n Updated at\u00a004.35 EDT<\/p>\n Eurozone bond yields have also dropped slightly, thanks in part to momentary relief over US-Iran peace talk progress, amid hopes it could ease geopolitical tensions and war-related inflation that reduce the prospect of further ECB rate rises.<\/p>\n The yield on Germany\u2019s benchmark 10-year bond yield was down 2 basis points at 2.966% this morning. (This is after having climbed 6 basis points on Friday after peace talks were abruptly called off)<\/p>\n It also comes as ECB president Christine Lagarde is set to appear<\/a> in front of European parliament\u2019s committee on economic and monetary affairs in Brussels this afternoon, starting at 2pm BST.<\/p>\n Her comments will come after the ECB became the first big central bank to raise interest rates<\/a> since the start of the Iran war, earlier this month.<\/p>\n While financial markets had been expecting two more ECB rate rises by next March, the weekend\u2019s peace talks have tempered those forecasts.<\/p>\n Share<\/a><\/p>\n Updated at\u00a004.34 EDT<\/p>\n Brent crude prices at lowest level since March<\/p>\n Oil prices are trading at their lowest level since March, though analysts say it may be too early to peg hopes on a sustained drop in energy prices despite progress in US-Iran peace talks this weekend.<\/p>\n Brent crude prices are at their lowest level since March. Illustration: Refinitiv<\/p>\n Stephen Innes, an analyst with SPI Asset Management, says it is important \u201cnot to overcook Monday\u2019s oil move\u201d :<\/p>\n double quotation markBrent shorts had built meaningfully last week, so part of the early upside looks like traders taking risk down rather than launching into a full-blown conflict trade.<\/p>\n When positioning has leaned too far into calm, it does not take much tension to force a little oxygen back into the price. That is less a declaration of war than a reminder that carrying shorts into a geopolitical negotiation is rarely a comfortable overnight position.<\/p>\n Share<\/a><\/p>\n Patrick Wintour and Jonathan Yerushalmy <\/p>\n Iran\u2019s foreign minister has declared \u201cprogress\u201d after the first day of talks between high-ranking officials from Washington and Tehran ended in Switzerland, despite a tense opening marked by Donald Trump<\/a> threats to restart attacks.<\/p>\n A joint statement from mediators Qatar and Pakistan said the \u2060US and Iran agreed to a roadmap towards\u2060 a final deal within 60 days. Technical talks between lower-ranked officials \u200bwill continue for the rest of the week, according to the statement, with fighting between Israel and Iran-backed Hezbollah<\/a> in Lebanon at the top of the agenda.<\/p>\n \u201cPakistani and Qatari mediation has delivered major progress to end Lebanon<\/a> war,\u201d said Abbas Araghchi, the Iranian foreign minister, after talks broke up just after 3am local time (1am GMT).<\/p>\n US vice-president JD Vance next to Pakistan\u2019s prime minister Shehbaz Sharif and Qatar\u2019s prime minister\u00a0and minister for foreign affairs Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani at the start of a quadrilateral meeting between the US, Iran, Pakistan, and Qatar at the Lake Lucerne Summit, on Sunday. Photograph: Getty Images<\/p>\n The joint statement said the US and Iran<\/a> agreed to establish a \u201ccommunication line\u201d to avoid incidents in the strait of Hormuz, and to set up a \u201cdeconfliction cell\u201d with Lebanon\u2019s government to ensure the \u201cadherence of the termination of military operations in Lebanon\u201d.<\/p>\n In a development that is critical to unlocking progress, the US Treasury was also preparing to issue a 60-day waiver lifting sanctions on oil, petrochemicals and derivatives. Iran<\/a> said this meant its central bank would be able to sell oil to customers, principally China, and receive payments without the threat of sanctions.<\/p>\n Qatar and Iran also signed a memorandum about the release of Iranian assets frozen in Qatar bank accounts due to US secondary sanctions. It was not clear whether the US had placed any restrictions on Iran\u2019s use of the assets, such as demanding the money only be spent on humanitarian goods.<\/p>\n The economic measures may help lift some of the pressure in Iran\u2019s exchange markets, and gradually slow runaway inflation, the country\u2019s biggest domestic concern at present.<\/p>\n Read more here:<\/p>\n Share<\/a><\/p>\n Updated at\u00a003.40 EDT<\/p>\n European stocks are kicking off the week on a positive note, amid news of progress on US-Iran peace talks.<\/p>\n Here\u2019s how they are looking at the start of trading:<\/p>\n FTSE 100 is up 0.11%<\/p>\n France\u2019s CAC 40 is up 0.15%<\/p>\n Spain\u2019s IBEX is up 0.08%<\/p>\n Germany\u2019s Dax is up 0.22%<\/p>\n Pan-European Stoxx 600 is up 0.11%<\/p>\n