UK gilts are being dumped wholesale, with Keir Starmer’s government losing ministers by the hour and the chorus of Labour MPs demanding the prime minister’s resignation growing louder by the day.

Starmer’s chair shakes: 10-year gilt yields break 5.1% for the first time since 2008

The sell-off in UK government bonds (Gilts) is so violent that 10-year yields have jumped 13 basis points to 5.13%.

After breaking through the 5% threshold, UK bond yields have now also pierced 5.10% for the first time since July 2008, confirming themselves as the highest among the major European sovereign yields.

According to data tracked by MacroMicro, 30-year gilts hit 5.77% on Tuesday — the highest print since May 1998 — with the 10-year breaking above 5.1% for the first time since July 2008. Three additional Bank of England rate hikes are now priced into the market before year-end, with Brent crude above $105 a barrel adding fuel through the energy-inflation channel.

Bond vigilantes won’t forgive Starmer’s government crisis

The message from the market is unambiguous: the bond vigilantes, who have had UK public debt in their crosshairs for some time, will not forgive the crisis once again engulfing the Starmer government.

As the UK daily The Guardian put it: «UK government borrowing costs rise as Starmer fails to reassure bond markets».

The bloodbath began on Monday, May 11, 2026, when yields on 30-year Gilts — particularly sensitive to political risk and public-finance concerns — jumped almost 10 basis points to 5.68%, with the selling spilling over into sterling, which fell against both the US dollar and the euro.

30-year gilt yields hit a record since May 1998 as more than 70 Labour MPs demand Starmer step down

On Tuesday, the bond vigilantes came back for more. The result: 30-year Gilt yields surged as high as 5.77% — the highest level in 28 years.

Starmer’s speech the previous day, a desperate attempt to project a semblance of stability, failed to defuse the tension exploding inside his Labour Party, which is still reeling from a humiliating loss of support at last week’s local elections.

The casualties are UK Government bonds, which were already grappling with the threat of accelerating inflation driven by the energy shock from the United States-Iran war and, as a result, the prospect of a Bank of England forced to raise interest rates further.

On Tuesday came another body blow for prime minister Keir Starmer: Communities Minister Miatta Fahnbulleh announced her resignation from government, issuing a clear call for the prime minister to step aside as well, «setting out a timetable for an orderly transition».

More than 70 Labour MPs are now calling for Starmer’s head, and he has so far given no sign of stepping aside after the party’s flop in the local elections. Speculation is mounting about who might replace him.

Among the names considered most credible are Health Secretary Wes Streeting, former deputy prime minister Angela Rayner, and Greater Manchester Mayor Andy Burnham. Both Rayner and Burnham — the latter currently ineligible to become prime minister as he is not a sitting MP — are seen as further to the left of Keir Starmer.

A fresh bearish wave, meanwhile, is once again hammering Gilts, as has happened repeatedly in the past. To put the move in perspective: 10-year Gilt yields have risen 29 basis points over the past month of trading. On a year-on-year basis, the increase is a hefty 48 basis points.

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on May 12, 2026 as «Bond UK, rischio carta straccia sale ogni giorno che passa. E cresce il numero di chi chiede la testa di Starmer». It has been translated and adapted for an international audience by the Money.it International desk.