UK long-term borrowing costs rise as Starmer faces pressure to stand down

UK long-term borrowing costs rose sharply on May 12 as political pressure on Keir Starmer intensified, with 30-year gilt yields hitting their highest level since 1998.

The move comes after AP reported that junior minister Miatta Fahnbulleh resigned and called on Starmer to step down, deepening the sense of turmoil around Labour’s leadership.

What the market did

The Guardian reported that 30-year gilt yields rose to about 5.794%, while 10-year gilt yields moved above 5.1%. The broader selloff reflects worries about inflation, fiscal credibility and the political outlook.

The bond move builds on earlier reports from May 11 that borrowing costs were already rising as investors reacted to uncertainty around Starmer and a speech that failed to calm markets.

What is driving the pressure

Markets have been watching both politics and policy. Official Bank of England materials show ongoing gilt sales under the Asset Purchase Facility, and HM Treasury correspondence from May 5 confirms continued coordination with the central bank on the unwind.

Those official documents do not address the political crisis directly, but they show that the government bond market is already under active management even before this latest selloff.

Why it matters

Higher gilt yields mean more expensive long-term borrowing for the UK government and can complicate fiscal planning if the move persists.

The immediate question is whether Labour’s internal pressure spreads further and whether the bond market stabilizes after the latest jump. For now, the combination of politics and inflation concern is keeping long-dated UK debt under strain.