Rise in UK borrowing costs reverses after cabinet backs Starmer
UK borrowing costs dipped back on Monday after rising earlier in the day, as cabinet ministers voiced support for the embattled Keir Starmer,The yield, or interest rate, on UK benchmark bonds initially increased on Monday as traders reacted to Sunday’s resignation of the prime minister’s chief of staff, Morgan McSweeney, over the decision to appoint Peter Mandelson as ambassador to Washington,Yields rose further after the Downing Street communications director, Tim Allan, resigned on Monday morning, with long-term borrowing costs then hitting their highest level since November, as the Scottish Labour leader, Anas Sarwar, called on Starmer to stand down as prime minister,With the Conservative leader, Kemi Badenoch, saying Starmer’s position was “untenable” after the departure of McSweeney, and the Green party leader, Zack Polanski, agreeing he should resign, the City of London was weighing up the prime minister’s survival chances, and assessing the impact of likely replacements on the public finances and the economy,At one stage, the yield on 10-year UK government debt rose by as much as 7 basis points (0.
07 percentage points) to 4.597%, matching a two-and-a-half-month high set last week.The yield on 30-year bonds was eight basis points higher at 5.42%, the highest since 19 November 2025, a week before the autumn budget.But borrowing costs then reversed almost all their earlier rise, after several cabinet members including the deputy PM, David Lammy, the chancellor, Rachel Reeves, the energy secretary, Ed Miliband and the defence secretary, John Healey, expressed support for the prime minister.
Angela Rayner, the former deputy prime minister and potential replacement for Starmer, also backed Starmer.“I urge all my colleagues to come together, remember our values and put them into practice as a team.The Prime Minister has my full support in leading us to that end,” she posted on X.Yields rise when bond prices fall, and indicate the rates at which investors are willing to lend to the government.The pound dipped by up to half a euro cent against the euro to €1.
1460, the lowest in more than two weeks, but was a little higher against the US dollar at lunchtime.“Movement among government bonds and the currency suggests there is no panic on financial markets about the stability of the UK government,” said Russ Mould, the investment director at AJ Bell.The likely candidates to replace Starmer would be more left-leaning; this implies higher spending and less focus on hitting the UK’s fiscal rules, which would typically be negative for UK government bonds and sterling.Rayner could take a more tax-and-spend approach, while the Greater Manchester mayor, Andy Burnham, has said Britain should stop being “in hock” to the bond markets.Capital Economics, the City consultancy, believes gilt yields are likely to rise if Starmer or Reeves are replaced, while the pound would weaken.
“The most likely longer-lasting influence is a loosening in fiscal policy that leads to higher gilt yields than otherwise and a weaker pound than otherwise,” said Ruth Gregory, the deputy chief UK economist at Capital Economics.The pound rallied against the US dollar in January but has dipped so far this month.Neil Wilson, an investor strategist at Saxo UK, suggested sterling could face more pressure “should the prime minster cop more heat over his appointment of Peter Mandelson as Britain’s ambassador to the US”.UK government bonds could be vulnerable, too.“Over the weekend, Starmer’s chief of staff, Morgan McSweeney, resigned and took responsibility for advising the PM to appoint Mandelson.
Far from drawing a line under things, this seems to have sparked renewed calls for Starmer to do the same.“Gilts were steady enough Monday morning but if the bond vigilantes were to sniff the likelihood of a leadership change I’d expect gilts to sell off, with sterling also hit as a proxy for investor sentiment towards UK political uncertainty and instability,” Wilson warned.
Barclays boss ‘shocked’ by Epstein revelations; BP annual profits slump 16% – as it happened
The chief executive of Barclays has said he is “deeply dismayed and shocked” at the “depravity and the corruption” revealed in the Epstein files, as the bank deals with the fallout of its ex-boss Jes Staley’s ties to the convicted child sex offender.In his first public comments on the matter since the US Department of Justice began publishing documents related to Jeffrey Epstein in December, CS Venkatakrishnan said his thoughts went out to the victims of Epstein, who died in jail in 2019 while awaiting child sex trafficking charges. He said:I’m very, very deeply dismayed and shocked by the moral depravity and the corruption that you’re reading about in the latest set of instalments. You know, my heart really goes out to victims of this scandal and these crimes.However, the Barclays boss – speaking as the bank reported annual profits – stopped short of commenting directly on allegations against his predecessor, Staley
AstraZeneca CEO hails NHS drug price deal but keeps pause on £200m UK investment
The boss of Britain’s biggest pharmaceutical company has said the government’s recent drug pricing deal is a “very positive step” but is unlikely to unfreeze a paused £200m investment in Cambridge.AstraZeneca’s chief executive, Pascal Soriot, suggested that a UK-US deal on NHS pricing agreed in December would not be “sufficient” to restart the project to build a research site in the east of England, which was paused in September.Soriot, who has rebuilt the company’s drugs pipeline since 2012 and turned it into the UK’s most valuable listed business, also described the US as “the most attractive market in the world”.During Keir Starmer’s visit to Beijing two weeks ago, AstraZeneca announced $15bn (£11bn) of investments in China, its second-biggest market, and is also pouring $50bn into US factories and labs by 2030.The British drugmaker listed its shares in New York and they began trading on 2 February, but it kept its main stock listing in London
Will the Gulf’s push for its own AI succeed?
Hello, and welcome to TechScape. Today in tech, we’re discussing the Persian Gulf countries making a play for sovereignty over their own artificial intelligence in response to an unstable United States. That, and US tech giants’ plans to spend more than $600bn this year alone.I spent most of last week in Doha at the Web Summit Qatar, the Persian Gulf’s new version of the popular annual tech conference. One theme stood out among the speeches I watched and the conversations I had: sovereignty
Apple and Google pledge not to discriminate against third-party apps in UK deal
Apple and Google have committed to avoid discriminating against apps that compete with their own products under an agreement with the UK’s competition watchdog, as they avoided legally binding measures for their mobile platforms.The US tech companies have vowed to be more transparent about vetting third-party apps before letting them on their app stores and not discriminate against third-party apps in app search rankings.They have also agreed not to use data from third-party apps unfairly, such as using information about app updates to tweak their own offerings.Apple has also committed to giving app developers an easier means of requesting use of its features such as the digital wallet, and live translation for AirPod users.The commitments have been secured as part of a new regulatory regime overseen by the Competition and Markets Authority, (CMA), which has the power to impose changes on how Apple and Google operate their mobile platforms after deciding last year that they had “substantial, entrenched” market power
Winter Olympics 2026 day four: more golds for Italy, Norway and Sweden; GB curling heartache – live
This is our top 10 after two runs:It’ll take something for oner of the top two to avoid taking gold; there’s a battle for that, then a battle for bronze.Anyroad up, it’s 0-0 with 10 to go in the first; elsewhere, we’re four minutes away from the resumption of the women’s luge singles. I should say, currently Italy lead Germany by a point, so if this match is a draw they’ll finish higher and take on second place in Group A.Both teams are already into the last eight, but the winner will avoid the winner of Group A – though you’d not back either to even run USA or Canada, the two teams in contention, close.We’re under way in our Italy v Germany Group B women’s ice hockey…Goodness me
‘My needles are waiting’: Ben Ogden credits knitting habit after cross-country silver
Ben Ogden delivered the most significant result in US men’s cross-country skiing in decades on Tuesday afternoon, winning Olympic silver in the men’s sprint classic at the Milano Cortina Games to end a 50-year medal drought.The mustachioed 25-year-old finished in 3min 40.61sec after surging through the final with his trademark classical technique, less than a second behind Norway’s Johannes Høsflot Klæbo, who secured the seventh Olympic gold medal of his career in 3:39.74. Klæbo’s teammate Oskar Opstad Vike took bronze after climbing from 20th in qualifying to the podium
A new town for the 21st century? Seven-village build to begin after 20-year journey
The troubling rise of longevity fixation syndrome: ‘I was crushed by the pressure I put on myself’
The sneeze secret: how much should you worry about this explosive reflex?
People with dementia are still people, with joys and interests of their own | Letters
NHS hiring bans in cancer units shortsighted and dangerous, doctors warn
Menstrual blood test could offer alternative to cervical screening for cancer