Susannah Streeter, chief investment strategist at Wealth Club, said: “A glass-half-empty attitude is swirling this morning for the FTSE 100, as concerns about the tense situation in Iran collide with worries about political upheaval in the UK.
“Far from managing to shore up support, Prime Minister Keir Starmer’s position looks increasingly shaky, and this is feeding through into fresh bond market jitters.
“Ten-year gilt yields have risen higher again, reaching above 5.11 per cent, the highest level since July 2008.
“With cabinet ministers now joining the throngs of MPs calling for him to step down, instability is back at the heart of British politics.
“This clouds the outlook for the financial management of the economy, and gilt investors are reacting, with prices falling and yields rising, an indication they want a higher return to compensate for the increased risk of taking on UK debt.
“But it’s not solely domestic politics piling on the pressure. Inflationary worries are rising again, given the latest setback for a resolution to the war with Iran.”
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