Stories

Fri, 15 May 2026

Fri, 15 May 2026 UK borrowing costs rise and pound falls as leadership drama continues

Analysts say the moves have been fuelled by concerns a Burnham-led government would increase government borrowing.

* UK government borrowing costs have reached an 18-year high, with a 10-year bond yield exceeding 5.17%
* The pound has fallen by 0.3% against the dollar and is now at its lowest point of the week
* Analysts attribute the market concerns to the possibility of a Burnham-led government increasing borrowing costs
* Long-term borrowing costs have also risen, with yields on 30-year gilts reaching a new 28-year high
* The price of oil has surged due to global tensions, but investors are more concerned about the potential for increased public borrowing under a Burnham-led government
* AJ Bell investment director Russ Mould and XTB research director Kathleen Brooks have both commented on the market's reaction to Burnham's leadership bid
* UK stocks have fallen, with the FTSE 100 index down by 1.7% on Friday.