Political instability, fears of drawn-out Labour leadership campaign, and possibility of Reform government all blamed for jump in UK borrowing costs
Last night, former hedge fund manager Rich McDonald warned that a long, drawn-out process to replace Keir Starmer as PM would be bad for the markets.
McDonald, who hosts IG’s podcast The Art of Investing, told Tonight with Andrew Marr on LBC that further weakness in the bond market would cost the country money.
“If we saw, let’s say Andy Burnham decided to run and there was some talk of a move to the left and more spending, I don’t think that would be taken well. And therefore, the bond market would give out a warning, right? If we see yields go anywhere near 6%, that that’s going to really scare people and it’s going to put up the cost of spending that we already have on our large debt position.”
“We saw the long gilts rise to the highest yields that we’ve seen in almost 30 years, and they have a very strong message for Labour. Get your house in order.”
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