The yield on the UK 10-year gilt eased to 4.83% after climbing over the previous two sessions, as investors awaited further clarity on the country’s political leadership. Speculation has intensified that Prime Minister Keir Starmer may announce his resignation, potentially opening the door for a new leader.
According to reports, Starmer could set out a timetable for his departure on Monday and oversee an orderly handover of power to Andy Burnham, following the Greater Manchester mayor’s victory in last week’s by-election. However, such an outcome is still far from guaranteed.
Markets are also seeking more detail on the potential political transition and on Burnham’s fiscal policy agenda, as concrete proposals remain limited. Investors are particularly focused on the risk of increased gilt issuance to fund higher public spending, a scenario that could further strain the UK’s already fragile fiscal position and substantial debt burden.
