Continued brushing since 1998 high! Political instability sparks deficit concerns, with 30-year UK bond yields surging to 5.86%.

The yield on the 30-year UK government bond rose by 20 basis points to 5.86% intraday, hitting the highest level since 1998. Prior to this, Manchester Mayor Andy Burnham was seen as a potential challenger to Keir Starmer for the position of UK Prime Minister. A Labour MP in the House of Commons announced his resignation on the 14th local time, allowing Burnham to return to the Commons as a member and thus qualify to challenge Starmer for the position of Labour party leader. Burnham's potential bid for Prime Minister has raised concerns in the market about possible fiscal expansion in the UK. Analysis suggests that Burnham has put forward more attention-grabbing tax and spending proposals that could pose greater risks to public finances. These include cutting the basic income tax rate in half and increasing borrowing to fund defense spending. However, it is not yet clear how the constraints of the presidency will curb his ambitions. JPMorgan strategist Mohit Kumar said, "The market is concerned that Burnham may lean further left, and we may see the deficit increase further. Our base case is for Starmer to orderly exit and Burnham is likely to be the next Prime Minister. We maintain a preference for steeper yield curves and are reducing exposure to the pound."