UK bond yields rise as Labour leadership uncertainty grows, borrowing jumps in May
10 reported4 unconfirmed
According to a single-source report from The Guardian, UK bond yields rose on June 19, 2026, as city investors reacted to the possibility of a Labour leadership battle following Sir Keir Starmer’s departure. The yield on UK 30-year bonds increased by 8 basis points to 5.529%, though this remains below the 27-year high of 5.89% set in May. Market analysts cited both domestic political risk and a setback in the US-Iran peace deal, which pushed oil prices higher and kept inflation fears alive. Dan Coatsworth of AJ Bell said the moves reflect the risk that Starmer “doesn’t go quietly,” while analysts at TS Lombard noted that gilts are constrained by the return of domestic political risk. Neil Wilson of SaxoUK suggested markets are already worrying about the outcome of the Makerfield by-election and a potential leadership win for Andy Burnham, whom he described as the least market-friendly option. The CBI’s CEO warned that the UK cannot afford a summer of speculation and drift while politicians are distracted by internal party dynamics. Separately, the Office for National Statistics admitted an error in its labour force survey data collection, which will reduce the quality of next month’s unemployment data.
What’s reported
UK 30-year bond yield rose 8 basis points to 5.529% on June 19, 2026.
The 27-year high of 5.89% was set in May 2026.
Dan Coatsworth of AJ Bell said Friday’s moves reflect the risk that Starmer “doesn’t go quietly” and the US-Iran peace deal setback.
Alexandros Xenofontos and Christopher Granville of TS Lombard said gilts are constrained by the return of domestic political risk.
Neil Wilson of SaxoUK said markets are worrying about the Makerfield by-election and a potential Burnham leadership win.
The CBI CEO Rain Newton-Smith warned against a summer of speculation and drift.
The ONS admitted it misallocated telephone interviewers for its labour force survey, affecting July’s unemployment data quality.
Russia’s central bank cut its benchmark interest rate by 25 basis points to 14.25%, less than the expected half-point cut.
Michael O’Leary’s contract as Ryanair CEO was extended for six years until 2032, with conditions including pre-tax profits over €4bn.
The National Drought Group reported drier conditions, with Southern England receiving 50% of average rainfall versus 90% in the North.
Open questions
Whether a Labour leadership election will occur and who will succeed Starmer.
Whether Andy Burnham will become Labour leader and what policy changes he might pursue.
Whether a snap general election will be called if Burnham replaces Starmer.
The full impact of the ONS data collection error on future labour market statistics.
Key figures
Dan Coatsworth, head of markets at AJ Bell
Alexandros Xenofontos, analyst at TS Lombard
Christopher Granville, analyst at TS Lombard
Neil Wilson, investor strategist at SaxoUK
Rain Newton-Smith, CEO of the CBI
James Benford, director-general for surveys and economic and social statistics at the ONS
Michael O’Leary, CEO of Ryanair
Helen Wakeham, chair of the National Drought Group and Director of Water at the Environment Agency
Sources: The Guardian
