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UK Bond Yields Spike as Starmer Rejects Resignation Demand

5/13/2026

50 6 Full Breakdown

Summary

Story summary

UK government bond yields rose for the first time since 2008 after Prime Minister Keir Starmer refused to resign despite 80 Labour MPs demanding his departure.
Starmer told his cabinet on 12 May 2026 in London he would not step down.
Junior ministers Miatta Fahnbulleh and Jess Phillips resigned, while Business Secretary Peter Kyle and Works and Pensions Secretary Pat McFadden backed Starmer, warning a leadership fight would destabilise economy.

History

Historical Context

In September 2008, Lehman Brothers’ collapse sent UK gilt yields sharply higher, prompting the Bank of England and Treasury to act to calm markets, reinforcing gilts as a safe-haven—by 2024 overseas investors owned roughly 31 percent of them. Today, Prime Minister Keir Starmer’s refusal to resign amid an 80-MP rebellion has lifted yields again, reviving fears of higher borrowing costs.

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Story summary

UK government bond yields rose for the first time since 2008 after Prime Minister Keir Starmer refused to resign despite 80 Labour MPs demanding his departure.
Starmer told his cabinet on 12 May 2026 in London he would not step down.
Junior ministers Miatta Fahnbulleh and Jess Phillips resigned, while Business Secretary Peter Kyle and Works and Pensions Secretary Pat McFadden backed Starmer, warning a leadership fight would destabilise economy.

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