Bond markets are bracing for UK PM Starmer's political rivals to break cover

Prime Minister Sir Keir Starmer giving a speech at the Coin Street Neighbourhood Centre in Waterloo, London. James Manning - Pa Images | Pa Images | Bond traders are bracing for more U.K. instability as Prime Minister Keir Starmer could be formally challenged by rivals on Thursday, as he clings to power. Health Secretary Wes Streeting is expected to resign to launch a leadership bid, while Starmer's former deputy Angela Rayner has reportedly been cleared of deliberate wrongdoing over her tax affairs, boosting her prospects for another potential leadership bid. Supporters of a popular third contender, Greater Manchester Mayor Andy Burnham, are said to pressing the Labour Party's governing body to extend the timeline for any forthcoming leadership election so that the he can seek the seat in parliament he would need to run for the leadership. A Labour leadership election can only be triggered if the leader resigns, or if 20% of MPs nominate a challenger, meaning 81 Labour lawmakers would need to back an individual bid. Competing leadership bids could create division among lawmakers over who to back to replace Starmer, who has vowed to fight on. While Streeting is seen as more of a continuity candidate, Rayner and Burnham lean more to the left — a factor that has rattled U.K. bond markets and sent borrowing costs higher, with investors fearing a more left-leaning prime minister could herald more borrowing and public spending, and higher debt. …