Starmer still has a friend in the bond markets

This article appeared as part of the Daily Sensemaker newsletter – one story a day to make sense of the world. To receive it in your inbox, featuring content exclusive to the newsletter, sign up for free here.

Keir Starmer has a vanishing number of allies in parliament, but still appears to enjoy a strong relationship with the gilt market. On Tuesday morning, the cost of government borrowing rose to its highest level since 1998 as Starmer faced growing calls to quit. Yields then eased after cabinet ministers came out to offer their support to the prime minister. In the short term, this will help Starmer to make the case that the country does not need the chaos of a leadership contest. In the medium term, if Starmer does go, as is widely expected, it signals the role that markets could play in scaring Labour ministers away from candidates who favour more expansionary economic policies. This may be bad news for the left wing of the party.