British government bonds fall as Burnham's victory and rising oil prices reignite fiscal worries.

British government bonds fell on Friday, reigniting inflation concerns as oil prices rose, while Andy Burnham, the Mayor of Greater Manchester, won a parliamentary seat in a special election, exacerbating political uncertainty in the UK. The yield on the 10-year UK government bond rose by 5 basis points to 4.81%, underperforming similar bonds in Europe. With the US and Iran delaying negotiations on a permanent peace agreement, and Brent crude oil prices returning to above $80 per barrel, global bond markets are under pressure. The yield on long-term UK bonds had already been pushed higher by the Iran conflict and reached its highest level since 1998 last month after Burnham expressed intentions to run for office. He won in the Meckelfield constituency in northern England, allowing him to challenge Prime Minister Keir Starmer's leadership. Kallum Pickering, Chief Economist at Peel Hunt, stated that this victory was "largely priced in by the market before it happened." He added that since parliament is not in session on Friday, Burnham may be sworn in on Monday. "Today and throughout the entire weekend, we can only speculate on how any challenge will unfold."