From SALOs to SMIDs: How investors are trading the UK as political turmoil rattles British markets

British assets have been volatile in recent weeks, as Prime Minister Keir Starmer's leadership has been called into question and political rival Andy Burnham takes a step closer to challenging his position. Burnham, widely expected to launch a leadership bid that could see Starmer ousted, has been confirmed as a candidate in a by-election that could see him return to parliament — a requirement for him to formally challenge the prime minister as leader of the governing Labour party. U.K. sovereign bonds, known as gilts, have seen volatile trade as Starmer defied lawmakers' calls for him to quit, which led to a swathe of resignations from his government. The yield on the benchmark 10-year gilt is hovering near a post-2008 high, while longer-maturity bond yields are near their highest levels since the late 1990s. The British pound and London's FTSE 250 index have also come under pressure in recent weeks. Citi's UK stocks to watch Despite the political turmoil gripping Westminster, many investors continue to take a bullish view on London-listed equities. In a Monday note, analysts at Citi said they remained overweight on the FTSE 100 , the index that houses the U.K.'s most valuable public companies. U.K. …