Overview
- UK 10-year gilt yields rose about three basis points on Wednesday and 30-year yields hovered near 5.2%, while the pound touched a two-year low against the euro.
- Downing Street accused Health Secretary Wes Streeting of plotting a challenge, he denied it on air, and Keir Starmer told MPs the briefings against ministers were unacceptable.
- Analysts warn that prolonged political instability could revive a risk premium on UK debt, pushing up borrowing costs and unsettling gilts and sterling.
- Reeves has courted City investors and signalled tax increases to build fiscal headroom, with the 26 November Budget expected to target roughly £30–35bn in tightening as reported by multiple outlets.
- Despite the tensions, the immediate market reaction has been limited compared with dire warnings, though UK yields remain elevated versus peers and roughly 30 basis points above comparable US Treasuries.