British Markets Tumble Amid Political Turmoil Surrounding Keir Starmer

British financial markets faced significant declines as Prime Minister Keir Starmer was engulfed in political uncertainty following high-profile resignations within his inner circle. The subsequent pressure on government bonds and the pound highlights investor concerns, exacerbated by questions over Starmer's leadership and his party's economic policies.

In a turbulent start to the week, British financial markets experienced notable declines. This came amid mounting pressure on Prime Minister Keir Starmer following the abrupt resignation of his director of communications, Tim Allan, a day after his chief of staff Morgan McSweeney also stepped down.

The resignations have fueled investor anxiety, leading to a selloff in stocks, bonds, and the pound. As a result, the 10-year gilt yield rose sharply, while sterling faced its most severe decline against the euro since last August. The FTSE-100 index plunged, primarily due to falling banking shares.

Amidst the political turmoil, Starmer's Labour Party faces criticism for failing to address key economic issues. The leadership crisis is compounded by poor polling and pressure on finance minister Rachel Reeves to adhere to stringent fiscal policies, leaving investors wary of the government's economic stability.

(With inputs from agencies.)