UK 10-Year Gilt Yields May Rise on Political Risk

UK 10-Year Gilt Yields Could Rise Further Due to Political Risk

Yields on UK 10-year government bonds could climb further due to political concerns ahead of a June 18 special election in the Makerfield constituency, according to Tickmill Group's Patrick Munnelly. Labour candidate Andy Burnham, viewed as more left-leaning, raises market worries.

Markets Fear Left-Wing Policies

Munnelly notes that markets worry the UK risks shifting to left-wing policies favoring higher public spending and potentially more public debt under Burnham's leadership. 'If a Burnham premiership becomes fully priced, estimates suggest scope for a further 40 basis-point increase in the 10-year term premium.'

Ten-year gilt yields trade flat at 4.855%, according to Tradeweb data.