‘Bond vigilantes are out’ as Starmer faces calls to quit
‘Bond vigilantes are out’ as Starmer faces calls to quit
Chris PriceTue, May 12, 2026 at 6:51 AM UTC
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Borrowing costs have risen as pressure grows on Sir Keir Starmer to resign - Carl Court/Getty Images
Bond vigilantes will push up the cost of government borrowing as pressure grows on the Prime Minister to quit, a fund manager has warned.
The benchmark for the cost of government borrowing is expected to rise back above 5pc on Tuesday after 79 Labour MPs publicly demanded his resignation.
Randeep Somel, a fund manager at M&G, told BBC Radio 4’s Today programme: “It looks like the bond vigilantes are out.
“We don’t know what’s going to happen with the leadership in Downing Street. We don’t necessarily know who will take over.
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“And if it is a move to the Left, the borrowing requirement for the country, bearing in mind we’re currently spending £200bn a year more than we’re taking in in receipts, the cost of that is likely to rise further.”
Bond yields, the return the government must pay to buyers of its debt, soared on Monday after Sir Keir’s attempt to reset his premiership dramatically backfired.
He faces an extraordinary weekly Cabinet meeting on Tuesday morning, with senior ministers split over how best to move forward and concerns among some about plunging the party into a potential leadership contest.
Christian Kopf of German asset manager Union Investment added that he expects the yield on 10-year gilts, as UK bonds are known, to rise back above 5pc.
Source: “AOL Money”
