Gilt yields rose slightly on Friday as U.K Prime Minister Keir Starmer faces a challenge to his leadership from a Labour Party rival.
Andy Burnham, the current Manchester mayor, is expected to contest a special election to parliament that, if he won, would give him the seat needed to challenge Starmer, whose premiership has been under pressure following a disastrous set of local election results last week.
Burnham is seen by the bond market as leaning more to the left — a factor that has sent borrowing costs higher, with investors fearing his premiership could mean more borrowing and higher debt.
Shortly after 8:00 a.m. in London, the yield on the benchmark 10-year gilt traded more than 1 basis point higher at 5.114%. The 2-year and 5-year gilts also rose by less than 1 basis point each.
Bond yields and prices move in opposite directions, with traders often commanding higher yields on debt investments when confidence in the government issuing the bonds is shaken.
