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UK Gilts Slide as Political Uncertainty Clouds Economic Outlook

British government bonds fell sharply as investors grew concerned about potential leadership turmoil within Prime Minister Keir Starmer's administration. Manchester Mayor Andy Burnham's emergence as a possible challenger to Starmer has sparked fresh anxiety about political instability in Westminster, with markets worried that a change in leadership could result in looser fiscal policy. The selloff extended across sterling and gilt markets, reflecting broader concerns about the UK's economic resilience. Investors fear that internal party divisions could undermine confidence in the government's financial management. The political jockeying comes as Starmer battles to consolidate control over his Labour government, with the potential for further challenges threatening to rattle financial markets.