{"id":582795,"date":"2026-05-14T02:28:09","date_gmt":"2026-05-14T02:28:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/582795\/"},"modified":"2026-05-14T02:28:09","modified_gmt":"2026-05-14T02:28:09","slug":"good-night-uk-city-giants-dump-bonds-over-starmer-leadership-crisis","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/582795\/","title":{"rendered":"\u2018Good night UK\u2019: City giants dump bonds over Starmer leadership crisis"},"content":{"rendered":"

Mr Burnham caused a jump in borrowing costs in September after saying that Britain was too \u201cin hock to the bond market<\/a>\u201d.<\/p>\n

Investor concern is increasing as a leadership crisis engulfs the top of the Government. Almost 100 Labour MPs have demanded that Sir Keir resign as Prime Minister in the wake of last week\u2019s local elections\u2019 heavy defeat, and four ministers have resigned in protest.<\/p>\n

Wes Streeting, the Health Secretary, is expected to resign<\/a> on Thursday and launch a formal challenge to Sir Keir\u2019s leadership.<\/p>\n

Mr Bezalel said Jupiter had cut its holdings of UK government bonds \u201cbecause we were worried about that political risk\u201d. The move came before the local elections in anticipation of a wipe-out for Labour. He added that Jupiter still held some five-year and 10-year gilts.<\/p>\n

Separately, Nicolas Bickel, an investment adviser at Edmond de Rothschild, said the bank was \u201cstaying away from longer-dated gilts at this stage\u201d given the \u201cprospect of political instability, looser fiscal policy and even a snap election\u201d. Mr Bickel added that \u201cpolitical instability could trigger gilt selling in an already illiquid market\u201d.<\/p>\n

Jefferies said it was avoiding bets on longer-term government bonds globally amid growing concerns about inflation and mounting debt.<\/p>\n

However, Mohit Kumar, the bank\u2019s chief European economist, said Jefferies was \u201cmost worried about the UK\u201d given the \u201cadditional impact from the ongoing political crisis\u201d.<\/p>\n

Kevin Thozet, a member of the investment committee at French asset manager Carmignac, agreed that UK bonds were \u201cparticularly vulnerable\u201d given Britain was already one of the most exposed countries to the inflation crisis triggered by the war in Iran.<\/p>\n

Addressing Sir Keir\u2019s future, Mr Kumar wrote in a note to clients: \u201cWe still think that a managed exit would be the most likely outcome. But any replacement is likely to be towards the Left and would further add to pressure\u201d on longer-term UK government bonds.<\/p>\n

Borrowing costs<\/p>\n

Long-term government borrowing costs are close to 28-year highs. The yield, or interest rate, on 30-year gilts fell slightly to 5.73pc on Monday after hitting its highest level since 1998 a day earlier.<\/p>\n

Benchmark 10-year gilts are still above 5pc, a level the market considers worryingly high. It exceeds the peak of 4.5pc seen in the aftermath of Liz Truss\u2019s 2022 mini-Budget, when the Bank of England was forced to step in and halt a runaway spiral in borrowing costs.<\/p>\n","protected":false},"excerpt":{"rendered":"Mr Burnham caused a jump in borrowing costs in September after saying that Britain was too \u201cin hock…\n","protected":false},"author":2,"featured_media":582796,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[456,84,1294,420,2053,160075,89136,5438,56,1893,54,55],"class_list":["post-582795","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bonds","tag-business","tag-economy","tag-keir-starmer","tag-labour-party","tag-live-priority","tag-local-elections","tag-standard","tag-uk","tag-uk-economy","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/582795","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=582795"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/582795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/582796"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=582795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=582795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=582795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}