Prime Minister Burnham said he will seek to use "any flexibility" in government fiscal rules, prompting investor concern the government may further increase the UK’s heavy debt burden and driving gilts lower. The 10-year gilt yield rose intraday as much as 7 bps to 5.02%; the 30-year yield gained 8 bps to 5.73%. The move reflects sensitivity to any sign the new government might loosen budget discipline; UK borrowing costs are among the highest in developed markets and public debt is close to 100

Prime Minister Burnham said he will seek to use "any flexibility" in government fiscal rules, prompting investor concern the government may further increase the UK’s heavy debt burden and driving gilts lower. The 10-year gilt yield rose intraday as much as 7 bps to 5.02%; the 30-year yield gained 8 bps to 5.73%. The move reflects sensitivity to any sign the new government might loosen budget discipline; UK borrowing costs are among the highest in developed markets and public debt is close to 100% of GDP. Markets had been buoyed ahead of Burnham taking office on Monday by expectations Home Secretary Shabana Mahmood would become chancellor, as she was viewed as a more fiscally conservative option.