British gilt yields rise, sterling dips as Burnham becomes UK prime minister

British yields are already the highest in the G7 group of advanced economies, and 10-year borrowing costs hit an 18-year high in May as the Iran war drove up energy costs.

That underscored fears about inflation around the world, and particularly in Britain where it has long been above target.

High public debt, and the scars of the Liz Truss mini-budget crisis in 2022, have also been weighing on bond prices and keeping yields elevated.

And investors remain nervous about Burnham's plans.

"I can't believe we've gone from this relatively long period of stable leadership to this rapid change of prime minister that gives no one that certainty for the longer term," said Oliver Blackbourn, multi-asset manager at Janus Henderson, speaking earlier on Monday.