![\"a](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/05\/00201585-614.jpg\"\/)
<\/p>\nLong-dated UK borrowing costs surged to their highest in nearly 30 years, sterling slumped and shares fell today as investors brace for a potential change of leadership that could weaken fiscal discipline.<\/p>\n
Keir Starmer was consulting colleagues about whether he can stay on as Britain’s prime minister today.<\/p>\n
Investors are worried that a replacement would be more left-wing than Starmer and push for more spending at a time when Britain’s finances are already stretched.<\/p>\n
UK borrowing costs remain the highest among the Group of Seven advanced economies and have risen the most since the Iran war, so a further rise will add to the pressure on its public finances.<\/p>\n
The benchmark 10-year gilt yield jumped 11 basis points (bps) to 5.11%, just below the highest levels since 2008 it hit in March on concerns around the inflationary impact of the Iran war.<\/p>\n
Longer-dated 20 and 30-year yields, more sensitive to fiscal risks, rose to their highest since 1998, at 5.12% and 5.80%.<\/p>\n
“The bond market is reacting not only to Starmer’s potential departure, but also to who his successor could be, and to the prospect of a drawn-out leadership battle that leads to more fiscal promises that the UK cannot afford,” said Kathleen Brooks, research director at broker XTB.<\/p>\n
The pound dropped 0.7% to $1.351 and was 0.4% lower against the euro at 86.92 pence.<\/p>\n
<\/p>\n
Stock markets also came under pressure with the FTSE 100 index down 0.5% this morning.<\/p>\n
British banks also fell with Barclays dropping 4%, while Natwest and Lloyds fell over 3% each.<\/p>\n
British banks were leading declines among European banking stocks.<\/p>\n
Analysts at JPMorgan said they now expected Britain’s banking surcharge to rise to 5% from 3% as a leftward shift in policy is more likely.<\/p>\n
Bond markets were also under pressure across Europe as hopes for a peace deal on Iran faded today as US President Donald Trump said a ceasefire was on “life support”.<\/p>\n","protected":false},"excerpt":{"rendered":"Long-dated UK borrowing costs surged to their highest in nearly 30 years, sterling slumped and shares fell today…\n","protected":false},"author":2,"featured_media":444977,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-444976","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/444976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=444976"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/444976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/444977"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=444976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=444976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=444976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}