UK 30-Year Yields Top 1998 High As Starmer Crisis Deepens. More

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Stephen Carroll 0:00
Hello, I'm Stephen Carroll. I'm in Brussels, where many of Europe's biggest decisions get made.
Caroline Hepker 0:05
And I'm Caroline Hepke in London. We're the hosts of the Bloomberg Daybreak Europe podcast.
Stephen Carroll 0:10
We're up early every weekday, keeping an eye on what's happening across Europe and around the world.
Caroline Hepker 0:15
We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going.
Stephen Carroll 0:21
From Brussels, I'm following the politics, policy and the people shaping the European Union right now.
Caroline Hepker 0:27
And from London, I'm looking at what all that means for markets, money and the wider economy.
Stephen Carroll 0:33
We've got reporters across Europe and around the globe feeding in as stories break.
Caroline Hepker 0:37
So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens.
Stephen Carroll 0:43
It's smart, calm and to the point.
Caroline Hepker 0:45
And it fits into your morning.
Stephen Carroll 0:46
You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris on Apple, Spotify, YouTube or wherever you get your podcasts. News when you want it with Bloomberg News Now. I'm Stephen Carroll.
Caroline Hepker 1:04
And I'm Caroline Hepker.
Stephen Carroll 1:06
The British Prime Minister faces growing pressure to step down this morning as the political uncertainty has driven the pound weaker and UK government borrowing costs higher. The Chief Secretary to the Prime Minister says Keir Starmer will make a decision on his future as a growing number of junior government ministers and backbench MPs are calling on him to quit. Here's what Darren Jones told Times Radio this morning.
Darren Jones 1:26
Well, the Prime Minister is talking to colleagues. Obviously, a number of them have said publicly yesterday that they want him to take a particular course of action. As any leader would, he's talking and listening to those colleagues. I can't get ahead of what the Prime Minister may or may not decide.
Unknown 1:41
So actually, he's considering setting out a timetable to step down before the next election?
Darren Jones 1:47
He's listening to colleagues and he's talking to colleagues. I can't get ahead of any decision he may or may not take.
Stephen Carroll 1:54
Darren Jones' comments came after Bloomberg learned that Cabinet ministers, including Home Secretary Shabana Mahmood, have privately told Starmer to set out a timetable to step down. More than 70 of Labour's 403 MPs have now called on Starmer to step aside. Chris Curtis is one of them.
Chris Curtis 2:13
I don't think we saw a plan from the Prime Minister in order to implement the kind of change that this country needs and I therefore think it's time for us to look for new leadership. And I think what that means is the Prime Minister rightly now setting out a timetable and an orderly process for a leadership election and one in which Labour has a discussion about the vision for the country and what changes we think are needed in order to face the very real challenges that Britain currently faces.
Stephen Carroll 2:40
Labour MP and head of the Labour Growth Group in Parliament, Chris Curtis there. The Prime Minister is chairing a crunch cabinet meeting this hour where he will have to confront some senior ministers who privately think his time is up.
Caroline Hepker 2:51
Now, UK bond yields have hit their highest level since 1998. Investors appear concerned that a change of prime minister could bring in a more left-leaning candidate whose spending plans would require increased bond issuance. The yield on 30-year guilt yields currently up by more than 11 basis points. But Callum Pickering, the chief economist at Peel Hunt, says that Labour will likely run into trouble trying to borrow more.
Callum Pickering 3:20
Well, at this stage, I'm more confident that the bond market will thwart any attempt to dramatically increase borrowing or even dramatically increase taxes, which would be anti-growth and probably bad for borrowing in the long run anyway. Then I am, the Labour at this stage won't at least attempt those kinds of policies. So the bond market at the moment is the ultimate check and balance on UK policy.
Caroline Hepker 3:45
Callum Pickering speaking there to Bloomberg Radio as James Stringer of Schroders advised investors to steer clear of UK debt.

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