UK Bond Market Watch: Labour Leadership Race Under Scrutiny
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The Iran conflict remains the bigger story, but the UK bond market is ready to react if extreme positions emerge from a formal Labour leadership contest.
It is wrong to think every move in the price of UK government debt, known as gilts, is caused by Labour's leadership turmoil. For bond traders, the outcome of the Iran crisis is still the main event.
These traders, often called "bond vigilantes," will not ignore events in Westminster. However, there is not yet enough information for them to adjust their expectations on inflation, interest rates, economic growth, or government borrowing.