Institution: The yield of British government bonds for high-quality institutions reflects political risk premium.

In a report, Patrick Munnelly of the Tickmill Group stated that compared to similar bonds in the US and the Eurozone, UK government bond yields are quite high, indicating that investors have already priced in a political risk premium. The upcoming special election in the Makerfield constituency next week could bring back political tensions, with the frontrunner for UK Prime Minister, Andy Burnham, running for a parliamentary seat in that constituency. Munnelly said, "While the Makerfield by-election may reinforce political narratives, it is unlikely to resolve the uncertainty surrounding leadership, fiscal rules, or policy direction." Data from Tradeweb shows that the yield on UK 10-year government bonds remained flat at 4.911%, higher than the 4.536% yield on US 10-year government bonds and the 3.055% yield on German 10-year government bonds.