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As it happened: Market jitters as Streeting set to make bid against Starmer

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Prime Minister Keir Starmer addressing media at a public event, wearing a dark suit and tie, gesturing confidently
Keir Starmer promised to "mainline AI into the veins"

Good morning and welcome back to the City PM liveblog.

UK borrowing costs are taking a modest breathe this morning after settling much higher yesterday after a session jam-packed with political turmoil.

The 10-year yield on UK gilts spiked ten basis points to over 5.1 per cent on Tuesday. Meanwhile, the 30-year yield soared to nearly 5.8 per cent after an increase of over nine basis points. The jump left the yield at its highest level since 1998.

Kathleen Brooks, research director at XTB, warned: “There is an upward bias for bond yields… and the UK yields are facing a double whammy of an energy price spike and a political crisis. The risk is that we get a bond market meltdown in the UK in the coming days.” 

The double shock came as oil prices extended their rally on Tuesday, picking up more momentum as hopes of peace in the Middle East faded.

The combined political tensions created the perfect storm for the FTSE 100, leaving it one per cent lower in early trading, though it was able to claw back some of these losses to finish up broadly flat.

Donald Trump heads to China today for a key summit that seeks to get a solution to the oil crisis choking the global economy.

China is the world’s largest buyer of Iranian oil and as such any progress from the talks is expected to be a major mover for markets.

We’ll be bringing you the latest on this and more.

Here’s a few of our top headlines this morning: