Investors are worried about political turbulence, after calls for resignation against Prime Minister Keir Starmer. The pound sterling is also falling.
The political crisis which is shaking the government in the United Kingdom is contaminating the economy. The interest rate on 10-year British government bonds reached its highest level since the 2008 financial crisis on Friday, in a context of global economic uncertainties. The 10-year rate, which had already reached levels not seen since 2008 on Tuesday, soared to a new peak of 5.144%. The 30-year rate rose to 5.812% on Friday, also coming close to its Tuesday level, which it had not seen since 1998. British Prime Minister Keir Starmer is fighting for his political survival after devastating local elections for Labor, following numerous controversies which had already weakened it, and faced in recent hours the maneuvers of potential rivals.
The pound sterling is also affected by the political crisis. This was unraveling on Thursday, with political turbulence in the United Kingdom chilling investors despite a solid growth rate which offers a breath of fresh air to the Labor government. Thursday evening, the British currency fell 0.86% against the greenback, to 1.3407 dollars per pound. “The pound sterling remains at the center of the news (…) as the United Kingdom continues to face a difficult political situation”note Monex USA analysts.
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British currency “is clearly under pressure” et “The situation could get even worse as the crisis scares away major buyers of foreign bonds.”they emphasize. In terms of good news, however, the British economy grew by 0.6% in the first quarter, according to statistics published on Thursday.
The pressure on Prime Minister Keir Starmer to push him to resign increased further on Thursday with the departure of the Minister of Health, Wes Streeting, expected to be his competitor. The latter, who represents the right wing of the Labor Party, says he “lost confidence” in the «leadership» of the British leader. However, he has not confirmed his intention to run for the Labor leadership, and thus try to dethrone Keir Starmer.
/2026/05/11/6a01cff440605435081408.jpeg "The Abandon, the last eleven days of Samuel Paty in a thriller closest to reality, presented out of competition at Cannes")
