""The prospect of a leadership challenge is yet another source of uncertainty for businesses and households that could prompt them to put off investment and spending," Thomas Pugh, chief economist at RSM UK, told clients in a note."
""Financial markets would likely respond by pushing gilt yields higher, as any successor is likely to be more spendthrift than Starmer and [Rachel] Reeves, raising borrowing costs across the economy.""
""The yield on the 30-year gilt climbed to 5.772 per cent on Tuesday, a level not seen since 1998, while the benchmark ten-year gilt jumped 0.13 percentage points to trade above 5.1 per cent, territory last visited during the 2008 financial crisis.""
Britain's small and medium-sized businesses are experiencing heightened borrowing costs, with the 30-year gilt yield reaching its highest level since 1998. The upcoming local elections are expected to result in significant losses for Labour, potentially leading to a leadership challenge for Sir Keir Starmer. Investors are concerned that a new leader from the Labour left may increase borrowing, further straining the economy. This uncertainty could deter businesses and households from investing and spending, exacerbating financial market volatility and raising gilt yields.
Read at Business Matters
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