The pound and gilts came under pressure on Thursday as investors worried about the risks to UK assets of the mounting leadership speculation surrounding Sir Keir Starmer.
UK borrowing costs rose to their highest since November, with the 10-year yield up 0.03 percentage points at 4.59 per cent, as the prime minister faced rising anger from his party over the fallout from the Jeffrey Epstein scandal and his decision to appoint Lord Peter Mandelson as the US ambassador in 2024.
The pound was down 0.6 per cent against the dollar at $1.356, and down 0.4 per cent against the euro.
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