Borrowing costs remain high Starmers future hangs balance MARKETS LIVE

UK-specific political uncertainty raises government borrowing costs (gilt yields), squeezing fiscal space and potentially impacting UK banks' sovereign exposure. Simultaneously, oil prices rise to $105/bbl on Middle East conflict fears, increasing input costs for UK energy importers and consumers. The FTSE 100 decline reflects broad risk-off sentiment. Commercial mechanism: higher oil prices → input cost pressure for UK corporates; higher gilt yields → higher funding costs for banks and government-dependent sectors.