UK gilt markets have shown a slight dip following the resignation of UK Prime Minister Keir Starmer, but there are no signs of major market movement following the announcement.
At the time of the prime minister’s announcement around 9:30am this morning, ten year gilts were at 4.85 per cent. As of midday, they were at 4.82 per cent, still higher than the 4.75 per cent they reached last Friday when Andy Burnham was confirmed as the winner of the Makerfield byelection.
Starmer has stated he intends to step down by the beginning of September. His resignation will spark a leadership contest, in which Burnham is widely expected to win.
Burnham’s policy positions could lead to higher levels of government spending, and possible renationalisation of utilities such as Thames Water.
Starmer’s two years in office have been beset by various legislative U-turns such as proposed changes to tax on farm inheritance and largely scrapping the winter fuel allowance, though did also include the passing of significant laws such as the Pension Schemes Act.
In 2022, a key reason for Liz Truss’ resignation as prime minister was reaction to economic policy and a ‘mini-budget’ that caused the gilts to raise from approximately 3.03 per cent to 4.42 per cent in just over a month.