Britain’s Prime Minister Keir Starmer speaks on the phone to U.S. President Donald Trump at a car factory in the West Midlands, Britain, Thursday, May 8, 2025.
Alberto Pezzali | Via Reuters
U.K. government borrowing costs spiked on Wednesday, amid mounting signs of division within the governing Labour party.
The yield on benchmark 10-year government bonds, known as gilts, was 22 basis points higher at 1:33 p.m. in London.
UK 10 year gilt yield
Tensions in the Labour Party leadership came to a head following a government U-turn over a controversial welfare reforms bill. The debate resulted in concessions to rebel lawmakers who opposed cuts to disability benefits that effectively wiped out the £5 billion of savings initially envisaged by the reforms — raising the prospect of further tax rises in the fall.
After the passage of the bill, British Prime Minister Keir Starmer was asked in Parliament whether his finance minister, Rachel Reeves, would hold her position for the remainder of his current term. Starmer deflected the question, instead pointing the finger at the leader of the opposition, Kemi Badenoch.
In a statement after the exchange in Parliament, the prime minister’s press secretary said Reeves “is going nowhere.”
“She has the Prime Minister’s full backing,” the press secretary said. “He has said it plenty of times, he doesn’t need to repeat it every time the Leader of the Opposition speculates about Labour politicians.”
Reeves has come under sustained pressure since the Treasury’s “Autumn Budget” last fall when she announced strict rules that limited the government’s ability to spend or borrow.
This breaking story is being updated.
