UK government borrowing costs have risen sharply amid speculation over Rachel Reeves’s position as chancellor, as City investors warned Labour’s welfare U-turn had blown a multibillion-pound hole in the public finances.
After Keir Starmer failed initially to give his full backing to a tearful chancellor at prime minister’s questions on Wednesday, the yield on 10-year UK government bonds, also known as gilts, was on course for the biggest jump in a day since Liz Truss was in No 10, while the pound slumped.
