UK borrowing costs rise and sterling falls as traders brace for Burnham
UK government borrowing costs have jumped at the start of trading, and the pound has fallen, as City traders respond to the news that Andy Burnham now has a chance to become Labour’s next leader.
UK bond prices have dropped at the start of trading, which pushes up the yield (or interest rate) on these gilts, while the pound has dropped against the US dollar.
Yesterday, Burnham was handed a potential route back to parliament when Josh Simons, MP for Makerfield, announced that he is resigning to free up a seat for Burnham.
Burnham, the Greater Manchester mayor, confirmed he would ask Labour’s ruling national executive committee (NEC) to allow him to stand in the contest. Allies of Starmer confirmed that he would not seek to block him.
Should he win and return to parliament, Burnham appears to be in a strong position to challenge Keir Starmer for the leadership of the Labour Party.
Yesterday, UK bond yields hit their lowest level since Monday after health secretary Wes Streeting failed to launch a leadership challenge as he quit the cabinet.
This morning, the yield on UK 10-year bond is up 11 basis points (0.11 of a percentage point) to 5.11%, suggesting concerns that the UK could aim to borrow more under a new prime minister.
Thirty-year bond yields are up 11 bps too to 5.76% – not far from the 28-year high of 5.81% hit on Tuesday.
Other government bond yields (such as the US and Japan) are rising too this morning, but UK borrowing costs are moving somewhat more sharply.
The pound has hit its lowest level in five weeks, down more than half a cent at one point to $1.333.
Kathleen Brooks, research director at XTB, says:
Plans to topple the Prime Minister have now burst into the open. Wes Streeting resigned from government, but did not announce a leadership challenge directly, as he waits for others to join the race. Andy Burnham is now expected to run in a byelection to pave a long and winding route to number 10, and Angela Raynor is also expected to run in any leadership race. Kier Starmer is also expected to stand. There is no timeline for a contest, so the current prime minister is now a lame duck indefinitely.
The pound is weakening this morning after a sharp drop on Thursday, when Andy Burnham threw his hat into the ring. GBP/USD is currently trading at $1.3350, a loss of 1.5% this week. This is a sign that Burnham is the least market-friendly of all the candidates, as Wes Streeting’s resignation did not have the same negative effect on the pound.
Key events
UK public more worried about cost of living crisis
Concerns about the UK’s cost of living crisis have jumped last month, as the Iran was pushes up energy prices.
Nearly 4 in 5 (79%) adults surveyed in April reported that their cost of living had increased compared with one month ago. This is an increase from 67% in March, and 56% in February.
The most commonly reported reason was the price of food shopping (cited by 92% of people), followed by the price of fuel (80%), and gas or electricity bills (60%)
Overall, 90% of people cited the cost of living as a concern; this jumped to 96% among younger adults aged 16 to 29 years.
This underlines why there has been such pressure on Keir Starmer’s leadership, and criticism that the government hasn’t done more to help struggling households.
The proportion of adults reporting international conflict as an important issue rose to 63%, the highest since the ONS started asking this question in October 2022.
Pound heads for its worst week since November 2024
The pound is heading for its worst week against the US dollar in eighteen months, after days of mounting pressure on prime minister Keir Starmer.
Sterling has dropped by around three cents so far this week – from $1.363 last Friday to $1.333 this morning, a five-week low.
That fall of 2.2% would be the biggest drop since 7-11 November 2024, when it fell by 2.35% against the dollar (which rallied when Donald Trump won the US presidential election).
Today, the pound is down two-thirds of a cent, as Andy Burnham prepares a run for parliament in the Makerfield constituency.
Political developments have overshadowed the markets this week, reports Mark Dowding of RBC BlueBay Asset Management.
Dowding says it looks “inevitable” that Starmer’s days are numbered, after the slew of ministerial resignations citing a loss of confidence in the PM.
He adds:
Against this backdrop UK financial assets and sterling seem likely to be subjected to an elevated political risk premium for an extended period.
As a result, we have added to short positions in the pound and see the outlook for sterling as very asymmetric, given that we struggle to see the currency rallying against a weak economic environment.
There is an argument that changing prime minister won’t lead to a major change in the UK’s fiscal stance, as Downing Street would still face the same constraints.
Lombard Odier’s Bill Papadakis, senior macro strategist, suggests memories of Liz Truss’s short tenure, after unsettling the market with large unfunded tax cuts, could curb the spending enthusiasm of any new leader.
Papadakis also explains:
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UK Prime Minister Keir Starmer is under pressure. His chances of staying in office look extremely narrow
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A change of Prime Minister would not necessarily mean a large shift in fiscal stance. A new leader would operate under the same constraints; a significant increase in borrowing to fund additional spending is therefore not our base case
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Political instability is not the dominant driver of higher Gilt yields, which have been rising since the start of the Middle East conflict, as higher energy prices put a stop to Bank of England’s easing cycle
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A gradual reopening of oil flows through the Strait of Hormuz – our base scenario – would bring UK economic fundamentals and potential rate cuts back into focus, supporting our medium-term constructive view on Gilts.
The financial markets are pricing in uncertainty and a likely leftwards shift in the UK, argues Neil Wilson, Saxo UK investor strategist.
There is a non-negligible chance that the market could overdo the risks from a Burnham leadership – a lot would depend on his choice of Chancellor. The situation remains very complex, however if we try to boil into simple terms for investors, the UK is in a very difficult position economically, fiscally and politically with no one seemingly able to come up with a credible plan to fix the nation’s finances and secure growth.
Inflation and yields are resetting at a higher level for the UK, which is not a good look for the currency.
Andy Burnham’s view on the bond market may also be pushing yields up today, suggests AJ Bell investment director Russ Mould:
“The decision of a Labour MP to stand down and pave the way for Andy Burnham to return to parliament – likely as a precursor to a leadership challenge – has seen gilt yields move yet higher.
“While there’s no guarantee Burnham would win a by-election or contest to be prime minister, the fact he is on record as saying Britain must stop being ‘in hock to bond markets’ has helped push UK borrowing costs higher and seen the pound slump.
“A process involving Burnham also promises to be more protracted and ‘noisy’, thereby prolonging and exacerbating the uncertainty about the political situation in the UK.
Goverment bonds are also being hit by a jump in the oil price.
Brent crude is up 2.2% this morning at over $108 a barrel, after Donald Trump said his patience with Iran was running out, during his visit to Beijing.
Higher oil prices will push inflation higher, making it harder for central banks to cut interest rates to stimulate growth.
Jim Reid, market strategist at Deutsche Bank, told clients this morning:
Markets have lost momentum after President Trump said the US doesn’t need the Strait of Hormuz open “at all”. So that’s added to fears that the Strait will remain blocked for some time, leading to a more protracted energy shock for the global economy.
Jump in yields is ‘grim news’ for UK
On the jump in UK borrowing costs this morning, Chris Beauchamp, chief market analyst at investing and trading platform IG, says:
“Andy Burnham’s long quest to find someone to make space for him in Parliament has finally succeeded, but the prospect of the ‘King in the North’s return has not been good for UK borrowing costs.
Worries about higher spending commitments have seen investors take flight from UK bonds. For a UK economy already facing a potential energy crisis, sapping growth, the rise in yields is particularly grim news.”
The Merseyside MP Paula Barker, an ally of Andy Burnham, suggested earlier this week financial markets would “have to fall into line” should the Greater Manchester mayor find a route to Downing Street.
Today, though, the markets are marching to their own tune, lifting borrowing costs…
Shorter-dated UK government bond yields have also risen this morning.
The yield on two-year is up 8 basis points (0.08 of a percentage point) at 4.5%, while five-year bond yields are up 8.5bps to 4.64%.
UK borrowing costs rise and sterling falls as traders brace for Burnham
UK government borrowing costs have jumped at the start of trading, and the pound has fallen, as City traders respond to the news that Andy Burnham now has a chance to become Labour’s next leader.
UK bond prices have dropped at the start of trading, which pushes up the yield (or interest rate) on these gilts, while the pound has dropped against the US dollar.
Yesterday, Burnham was handed a potential route back to parliament when Josh Simons, MP for Makerfield, announced that he is resigning to free up a seat for Burnham.
Burnham, the Greater Manchester mayor, confirmed he would ask Labour’s ruling national executive committee (NEC) to allow him to stand in the contest. Allies of Starmer confirmed that he would not seek to block him.
Should he win and return to parliament, Burnham appears to be in a strong position to challenge Keir Starmer for the leadership of the Labour Party.
Yesterday, UK bond yields hit their lowest level since Monday after health secretary Wes Streeting failed to launch a leadership challenge as he quit the cabinet.
This morning, the yield on UK 10-year bond is up 11 basis points (0.11 of a percentage point) to 5.11%, suggesting concerns that the UK could aim to borrow more under a new prime minister.
Thirty-year bond yields are up 11 bps too to 5.76% – not far from the 28-year high of 5.81% hit on Tuesday.
Other government bond yields (such as the US and Japan) are rising too this morning, but UK borrowing costs are moving somewhat more sharply.
The pound has hit its lowest level in five weeks, down more than half a cent at one point to $1.333.
Kathleen Brooks, research director at XTB, says:
Plans to topple the Prime Minister have now burst into the open. Wes Streeting resigned from government, but did not announce a leadership challenge directly, as he waits for others to join the race. Andy Burnham is now expected to run in a byelection to pave a long and winding route to number 10, and Angela Raynor is also expected to run in any leadership race. Kier Starmer is also expected to stand. There is no timeline for a contest, so the current prime minister is now a lame duck indefinitely.
The pound is weakening this morning after a sharp drop on Thursday, when Andy Burnham threw his hat into the ring. GBP/USD is currently trading at $1.3350, a loss of 1.5% this week. This is a sign that Burnham is the least market-friendly of all the candidates, as Wes Streeting’s resignation did not have the same negative effect on the pound.
The Sunday Times have also calculated the UK’s biggest donors to charity.
Hedge fund manager Sir Chris Hohn tops the list after giving away £1.4bn — or 16.8% of his estimated £8.6bn wealth in the last year, either personally or through his three foundations which include The Children’s Investment (TCI) fund.
Hohn who was once Rishi Sunak’s boss, is pushing other super-rich to follow his lead, saying:
“I don’t need to persuade [anyone] that rich people are hoarding their money, many have made pledges but it’s about 0.4 per cent of their wealth they give away a year.”
“I’m not doing this for publicity, but to see if I can encourage others to give. Our life is a gift and that means our money is a gift and we’re meant to share it.”
Patriotic Millionaires UK: a ‘smack in the face’ for those struggling with cost of living
This year’s rich list is another “smack in the face” for millions of ordinary people battling an ever-worsening cost of living crisis, says Phil White, member of Patriotic Millionaires UK.
White:
The fact the number of billionaires has risen to 157 and their wealth has grown to £784 billion is outrageous, while one in five kids are living in poverty, small businesses are going under, and services are crippled by underinvestment.
Right now, it feels like the Rich List is a running total of everything that is wrong in our society—a handful of people counting obscene amounts of wealth while everyone else scrapes by. It’s blindingly obvious, to anyone paying attention, that we need to do something about this.
We need to give Brits a fighting chance to start living; not just surviving.
Earlier this week, Patriotic Millionaires UK reported that nine in 10 UK millionaires are proud to live in Britain and three-quarters would be willing to pay more tax to ensure public assets get the funding they need.
TUC: It’s time for wealthiest to pay their fair share
The TUC points out that the number of billionaires has doubled since 2010 while real wages have pretty much stagnated over the period.
TUC general secretary Paul Nowak said:
Under the Conservatives, the wealthiest were allowed to feather their nests while working people suffered an epidemic of insecure work and the worst pay stagnation in two centuries. Clearly wealth has not trickled down – it has been hoarded by those at the top.
“This isn’t right. With ordinary people struggling to pay the bills, it’s time for billionaires to pay their fair share in tax to protect households and firms from the effects of Donald Trump’s illegal war.
“People have had it with a system where those with the broadest shoulders don’t pull their weight.”
JK Rowling now worth £975m
Author JK Rowling is rising towards billionaire status.
The Harry Potter creater’s wealth has risen to £975m from £945m in 2025.
The new TV adaptation of the boy wizard’s antics should keep the royalties rolling in for Rowling, who also writes fiction for adults under the “Robert Galbraith” pseudonym.
The Sunday Times estimate that Rowling has earned more than £1bn from her writing, and the original eight Harry Potter films. But her “vast charitable donations, including to refuges for women fleeing domestic violence” mean she’s not quite got billionaire status yet (one Ascendio spell should do the trick, though…)
Rishi Sunak and Akshata Murty’s net worth has dropped, but they’re still the wealthiest couple ever to have lived at 10 Downing Street.
The Sunak-Murty fortune has dropped to £563m, from £640m in 2025,meaning they’ve slid down to 248th place, from 238th last year.
Thsi decline is due to a 20% fall in the value of Infosys, founded by Murty’s father, in which Akshata owns a stake of around 1%.
Noel and Liam crash the rich list
Oasis musicians Noel and Liam Gallagher have strode onto the rich list stage, with a combined fortune of….definitely, maybe…£375m.
This follows their successful reunion tour last year, which pulled in almost £400m. The Sunday Times says this has “provided the perfect warm-up act for a sale of the group’s song rights”.
Billionaire Beckhams!
New billionaires this year include Sir David and Victoria Beckham.
The Beckham’s fortune has more than doubled in the last year, up to £1.185bn from £500m in 2025.
Part of the increase is due to David’s stake in US football club Inter Miami – bought for $25m and now worth £300m.
The property complex built around Nu Stadium, Inter’s Miami’s base, is another factor, The Sunday Times explains:
The 131-acre Freedom Park development encompasses shops, offices, restaurants, and parkland and residential homes. The Beckhams’ investment here should be worth another £370 million.
As well as property, Victoria’s fashion brand is another valuable asset.
Sources close to Neo Investment Partners, which co-owns the business, have suggestede it is worth £375m – meaning the Beckham’s 35% stake is worth an estimated £130m.
Dyson and Ratcliffe drop down rich list
Not every billionaire grew wealthier last year – sirs James Dyson and Jim Ratcliffe are among the big fallers.
Dyson’s estimated fortune has been slashed by £8.8bn to £12bn, due to lower revenues at his electricals empire, partly due to Donald Trump’s tariffs. This has pulled Dyson and family down to 13th on the list, from 4th last year.
Ratcliffe, who owns chemicals giant Ineos (and a stake in Manchester United), has fallen from 7th to 9th on the list, after his wealth was cut by £1.85bn to almost £15.2bn.
Ineos has been hit by “a prolonged downturn in demand and tough competition from cheap imports”, leading to rising debt and a loss last year.
Christopher Harborne in 6th place on Rich List
A new name has appeared on the Rich List Top Ten this year – Christopher Harborne.
According to The Sunday Times Rich List, the Thailand-based investor’s estimated wealth of over £18bn makes him the wealthiest British-born entrepreneur.
Robert Watts, who compiles the list, has placed Harborne 6th overall after analysing the “diverse range of businesses owned by the Yorkshire-born investor”.
Much of Harborne’s estimated wealth comes from his stake in Tether, the cryptocurrency firm which issues stablecoins. Tether has been valued at $200bn, based on the private sales of shares in the company. Harborne owns 12% — giving a stake worth £17.7bn.
Watts writes:
Harborne, 63, has lived in Thailand for nearly 30 years. Many of his companies are based in countries where obligations to report profits, revenues and other financial information are less onerous than in the UK. This has long posed significant challenges for anyone trying to assess his personal fortune.
His easiest to identify asset in the UK is his holding in QinetiQ, a Hampshire-based defence contractor listed on the London stock market and a member of the FTSE 250 index. Harborne is the biggest shareholder in the company, owning a 14.2 per cent stake that was worth £357 million when the Rich List was compiled.
Watts also cites Harborne’s ownership of IFX Payments, a money transfer operation based in the heart of the City of London, and reports that he also owns Eclipse Aerospace, a private jet maker based in Albuquerque.
But… that £18bn could be an understatement, Watts adds, as some of Harborne’s companies and assets are very hard to value.
Harborne hit the headlines last month after the Guardian reported he had given Nigel Farage £5m in 2024, which is now being investigated by the parliamentary standards watchdog.
Farage, incidentally, has claimed Tether could be worth $500bn, which would indicate Harborne’s stake could be worth £44bn!
Last year, the businessman donated £9m to Reform UK, the largest single donation by a living person to a British political party. In total, he gave £12m to the party in 2025.
Introduction: UK richest families now worth £784bn.
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Britain wealthiest people have grown even richer over the last year.
The latest Sunday Times Rich List has just been published, showing that the combined wealth of the UK’s 350 wealthiest individuals and families rose by 1.4% in the last year to £784bn.
Britain’s total of billionaires has inched up by just one, to 157. After peaking at 177 in 2022, the billionaire count had fallen for three years running.
And while this huge wealth pile could intensify calls for sharper taxes on the rich, the Rich List also shows some evidence that billionaires have left the country to avoid wealth taxes.
Robert Watts, compiler of the Rich List, explains:
“This year’s Rich List is a tale of two exoduses. One in six of the individuals and families who appeared on the list two years ago don’t feature this time.
“Many foreign billionaires who have been living in the UK have also dropped out because they have moved away. We have also seen a sharp rise in the number of British nationals now resident in Dubai, Switzerland and Monaco. As UK nationals these people remain on our Rich List – wherever they now live.
“These two exoduses pose challenges for the UK economy and its public finances. Will more of the wealthy now set up or grow their ventures overseas and in doing so create fewer jobs here? How much tax – if any – will Rachel Reeves’ Treasury be able to extract from those affluent Brits who have now left the country.”
Topping the list, again, are the Hinduja family, worth £38bn through their Indian conglomerate Hinduja Group. This year, the award is shared by “Sanjay and Dheeraj Hinduja and family”, after the head of Britain’s richest family, Gopichand Hinduja, died last November.
Other notable names on the top ten are the Reuben family, for their property interests, the Weston family (whose AB Foods business owns Primark), crypto billionaire Christopher Harborne (of which more in a moment) and Revolut co-founder Nik Storonksy.
Here’s the top 10:
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Sanjay and Dheeraj Hinduja and family: £38bn
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David and Simon Reuben and family: £27.971bn
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Sir Leonard Blavatnik: £26.852bn
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Idan Ofer: £24.481bn: £24.481bn
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Guy, George, Alannah and Galen Weston and family: £18.939bn
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Christopher Harborne: £18.177bn
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Nik Storonsky: £16.411bn
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Alex Gerko: £16.006bn
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Sir Jim Ratcliffe: £15.194bn
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Igor and Dmitry Bukhman: £14.26bn
The rankings are based on estimated wealth as of April 24, 2026.
To get onto the list (onto 350th place) you need £340m – a drop of £10m, which Watts calls “another indicator of the sluggish economic environment.”
The agenda
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1.30pm BST: NY Empire State manufacturing index
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2.15pm BST: US industrial production report for April
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5pm BST: Russian GDP and inflation report
