FTSE 100 Live: Pound Recovers Some Ground as Starmer Backs Reeves
Incidents like yesterday do damage to market confidence in the government, and that means they have to price more risk into UK bonds, which leads to higher borrowing costs and therefore more pressure on the country's finances.
'It takes very little to light the fuse when things are in a bad place,' said Neil Mehta, a portfolio manager at RBC BlueBay Asset Management, on gilts' vulnerability to sudden slides. 'Markets will be on high alert over the next months.'
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