UK PM Starmer Refuses to Resign; Gilts Rise 8bp, Sterling Up 0.5% on May 8

According to Golden Ten Data, on May 8, UK Prime Minister Keir Starmer confirmed he will continue leading the Labour Party despite electoral losses, triggering a rebound in British government bonds and sterling. The 30-year gilt yield fell 8 basis points to 5.55%, while GBP/USD rose 0.5% to 1.3614. With roughly one-third of English local councils counted, the Reform Party gained 275 seats net while Labour lost 204 seats. Craig Inches, rate and cash manager at Royal London Asset Management, attributed the gilt rally partly to short covering: “Market expectations for Labour’s defeat appeared overly pessimistic, so gilts may have seen some short-covering.” Results are expected to conclude Friday.