[MARKET ANALYSIS] UK assets potentially have a few hours of respite before/during the Kings Speech, before attention firmly returns to PM Starmer
- For the UK, the mood music around PM Starmer remains bleak, with The Guardian most recently reporting that the Labour-affiliated unions will be pushing for a leadership change at some point. Additionally, Starmer is due to meet Streeting today, who has the required numbers to spark a leadership contest; The Times reports that Streeting is prepared to resign and spark a leadership contest, if needed. However, given the King's Speech, we do not expect any significant developments until that concludes, the ceremony starts around 09:30BST, the speech around 11:30BST and Parliament will return to debate the speech around 14:30BST. Technically, for Gilts, we have yesterday’s contract low of 85.45, before attention once again reverts to the 10yr yield.
Context
The announcement regarding PM Starmer's challenges hints at underlying political instability that could weigh on UK assets, particularly Gilts. While the King's Speech may provide a temporary reprieve, the looming potential for a leadership contest adds significant uncertainty that could impact investor sentiment and interest rates in the longer term.
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