Good morning and welcome back to the City AM liveblog. Thursday’s local elections are threatening to send shock waves through the market, as Keir Starmer’s position as Prime Minister teeters in the balance. Gilt yields hit a 28-year high on Wednesday, as investors weighed up the prospect of a new
Felix Armstrong
Wednesday 06 May 2026 6:31 am
Good morning and welcome back to the City AM liveblog.
Thursday’s local elections are threatening to send shock waves through the market, as Keir Starmer’s position as Prime Minister teeters in the balance.
Gilt yields hit a 28-year high on Wednesday, as investors weighed up the prospect of a new Prime Minister, as Ed Miliband, Angela Rayner and Andy Burnham circle to Starmer’s left.
This shaky market sentiment comes as investors weigh up the loose approach to fiscal discipline that any one of these figures are likely to bring to Downing Street.
Fears of rising inflation are also prompting the gilt markets to shudder, as the Bank of England’s unconvincing rates hold last week failed to preclude the potential of several rate hikes later this year.
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In further signs that Reeves’ regime of fiscal “stability” is under threat, City AM revealed this morning that the Treasury watchdog’s own estimates – dating back to 2024 – suggest the Chancellor is set for a borrowing spree to keep a lid on inflation.
A freshly uncovered Office for Budget Responsibility (OBR) note said the government would have to borrow £23.1bn more a year if there were an energy supply shock “comparable to the 1973 oil embargo” – and analysts have widely compared the Iran war to this crisis.
In a sudden reversal late last night, President Trump said he will pause “Project Freedom” in order to finalise a peace deal with Iran, boosting hopes of a permanent solution to the conflict.
This comes as Trump’s administration insist that the main part of their war with Iran is over. Seecretary of State Marco Rubio said: “The operation is over. Epic Fury – as the president notified Congress – we’re done with that stage of it.”
The price of Brent crude oil is slightly down this morning, at $108.04, though well above the $100 mark.
We’ll be bringing you the latest as it unfolds.
Here’s a few of our top stories this morning Read more FTSE 100 Live: Gilt yields surge over Starmer fears; Intel, Pinterest shares rocket
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