New threat to Labour spending plans as UK long-term borrowing costs hit highest level since 1998

The risk to Labour’s tax and spending plans from the war in Iran was underscored on Tuesday, as long-term government borrowing costs hit their highest level since 1998.Fears of higher inflation as a result of the conflict have fuelled a selloff across government bond markets, which City analysts say has been exacerbated in the UK by uncertainty about the future of Keir Starmer’s government.The yield – effectively the interest rate – on 30-year UK government bonds (gilts) hit 5.77% on Tuesday – exceeding the 27-year high reached last September.Mohamed El-Erian, chief economic adviser at Allianz, said he was “concerned for the health of the UK economy”, after the latest market moves

UK electric car sales leap ‘could be hit by Iran war inflation and energy price rises’

A recent jump in electric car sales in the UK is likely to be “tempered” by worries over rising inflation and energy prices caused by the Iran war, a leading industry body has warned.New car sales in the UK rose by 24% year on year to 149,247 in April, according to the Society of Motor Manufacturers and Traders (SMMT).The trade body said battery electric vehicle (BEV) sales jumped by 59.1% last month and the two millionth electric car had been registered. They accounted for more than a quarter (26

Australians are poorer because of war on the other side of the world – Michele Bullock’s logic is hard to fault

As far as rallying cries go, Michele Bullock’s “we are poorer, and there is no way out of that” leaves a lot to be desired.It’s not going to win you any applause, particularly when you’re the governor of a central bank that has just announced a third rate hike.But as a blunt way to describe what the US-Israel war on Iran means for everyday households, it’s hard to fault.“Australians are poorer because of this shock to oil prices and energy prices and all the other commodity prices that are being impacted,” Bullock told journalists.“So yes, we are all feeling poorer

Vodafone to take full control of UK mobile operator in £4.3bn deal

Vodafone is to take full control of the UK’s biggest mobile operator in a £4.3bn buyout deal with the Hong Kong conglomerate CK Hutchison.The billionaire Li Ka-shing’s business said it had agreed to sell its 49% stake in VodafoneThree – a network with more than 27 million subscribers – to its partner Vodafone.Vodafone will buy out CK Hutchison, paying cash, and cancel the shares.The deal is part of CK’s efforts to reshape its global portfolio, offloading major assets to boost shareholder returns

Reform UK’s immigration policies are a significant risk to the UK economy | Sushil Wadhwani

While all eyes are on the Middle East and the risk of a global recession, a possible scenario with significant downside risk for the UK economy after the next general election is building: the impact of anti-immigration policies.We do not know enough about the actual policy changes a Reform UK-led government would impose, but if we get forced repatriation (including of some who were born in Britain) combined with a climate of fear, the economic disruption could be highly significant.The number of people affected by Reform UK’s policies is necessarily uncertain, but it has been estimated that the party might want at least 2 million people to leave the country, which is considerably higher than previous talk of deporting 600,000 people.Minority ethnic NHS doctors and nurses already report that they encounter increased levels of racism at work. Home Office numbers show a steep decline in the number of foreign nurses granted entry into the UK over the past three years

‘There is a good deal of fear’: what would a Labour leadership challenge mean for bond markets?

Who calls the shots on the bin collections in Sunderland, potholes in Hackney, or schools in Cardiff is not normally of interest to City traders in the multitrillion-pound sovereign bond market.But for those dealing in UK government debt, Thursday’s local and devolved government elections are significantly more important than usual, amid speculation that a dire showing for Keir Starmer’s Labour party could topple him as prime minister.“Usually local elections should not be a market relevant event, but this has indeed become one,” said Sanjay Raja, the chief UK economist at Deutsche Bank.“Mainly as the repercussions, not just from a leadership challenge, but also any changes to fiscal policy and any pressure on fiscal rules the chancellor had signed up to. That is what the market is really signed up to