As it happened: Markets on high alert as Streeting calls on Starmer to resign

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The past few days of political drama have to come to a head today and UK assets are bracing for a showdown.

All eyes were on the bond market after Wes Streeting resigned as health secretary and called for a leadership contest.

Gilt yields see-sawed yesterday as Sir Keir Starmer rallied his troops to defend his premiership and have remained somewhat eased today, but the latest pressure on Downing Street have put them back under spotlight.

Neil Wilson, UK investor strategist at Saxo Markets, said: “The question is whether Angela Rayner launches a bid and critically, does Andy Burnham have a path back to becoming an MP. The market response to the contest will depend on this.”

Fresh growth data has thrown a spanner in the works, however, with Chancellor Rachel Reeves using the 0.3 per cent growth in March to claim that her economic plan is working and any disruption would be harmful for the economy.

Also, Angela Rayner has also confirmed she has settled her tax affairs with the HMRC with allies of the former deputy prime minister briefing that she is ready to run to stop Streeting.

“A leadership vote would tend to raise gilt yields, and I think we have to contend now with structurally higher rates for a while,” Wilson said.

Elsewhere, pressures on markets were driven by the prolonged conflict in the Middle East.

Donald Trump is in China this week for key talks with Beijing over ways to get the oil supply flowing again as the closure of the Strait of Hormuz continues to clog up global output.

In the opening remarks of their meeting, China’s President Xi Jinping said China and the US “both stand to gain from cooperation and lose from confrontation”.

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