UK borrowing costs storm past five per cent after Starmer warns of ‘chaos’ if ousted
UK government borrowing costs have stormed higher following an attempt from Prime Minister Sir Keir Starmer to shore up support after a disastrous local election result.
The yield on 10-year gilts rose nearly 10 basis points to over five per cent for the second time in mere weeks. It comes after Starmer sought to defy his doubters as he warned of “chaos” if he’s forced out of his premiership.
The yield on 30-year government bonds rose 10 basis points to near 5.7 per cent, nearing a 27-year high the government suffered at the beginning of this month.
The Prime Minister claimed that the fight against Reform and the Greens constitutes a “battle for the soul of our nation” and other parties want “more grievance politics, more division, more pointing at Britain’s problems”.
“This is nothing less than a battle for the soul of our nation, and I want to be crystal clear about how we will win it, because we cannot win as a weaker version of Reform or the Greens,” he said.
Starmer added: “We are not just facing dangerous times, but dangerous opponents, very dangerous opponents. This hurts not just because Labour has done badly, but because if we don’t get this right, our country will go down a very dark path.”
Starmer: I have made mistakes
The under-fire Labour leader admitted to having “made mistakes” and claimed to have “spent too much time talking about what I’m doing for working people and not enough time talking about why…”
Starmer laid out three areas where he hoped to show the “urgency” of his government.
This included legislation to nationalise British Steel that is set to be brought forward this week in the King’s Speech on Wednesday.
He framed the move as “urgent government on the side of working people” that would make “Britain stronger with the hope of industrial renewal”.
Starmer also pledged to focus on rising youth unemployment, where he promised more funding for apprenticeships to get young people into work.
He took a shot at the damage caused by Brexit, which he said “snatched away” young people’s “ability to work, to study and to live easily in Europe”.
Starmer doesn’t rule out re-joining EU customs union
Starmer hinted at closer ties with the European Union: “Standing shoulder to shoulder with the countries that most share our interests, our values and our enemies that is the right choice for Britain, that is the Labour choice.”
Asked whether these ties could lead to Labour breaking its manifesto not to rejoin the EU’s single market, customs union or freedom of movement, he said he wants to “take a big leap forward with the EU-UK summit” in the summer.
He added it would “take us closer both on trade, the economy, defence and security”.
Bond markets were jittery throughout the speech, with the yield on 10-year gilts spiking seven basis points as rivals circled Starmer.
Around 34 Labour MPs have called for the Prime Minister to resign, meanwhile senior figures in the party are calling for a major change in direction.
Former deputy leader Angela Rayner said the “government needs, at pace, to put measures in place that make people’s lives tangibly better”.
She also branded the blocking of Andy Burnham from returning to Parliament a mistake.