Speculation over Reeves's future chancellor role causes borrowing costs to surge and pound to drop.

Markets are reacting to speculation about a replacement chancellor for Rachel Reeves, causing borrowing costs to surge and the pound to drop. Sir Keir Starmer’s failure to guarantee Reeves’s role led to significant bond market movements. Downing Street backed Reeves, but concerns remain about public finances and potential tax hikes.

Reeves faces a budget shortfall due to welfare reform changes and potential tax raids. Party discipline issues in Labour raise concerns about managing public finances. Experts warn of unsustainable spending and the need for tough decisions to avoid a fiscal crisis. Investors are on high alert for future developments.

The market reacts to the government’s control over public spending and potential tax hikes. Further rises in employer National Insurance could lead to more bankruptcies. Reeves faces a significant budget shortfall, and insolvency forecasts may increase if businesses bear the burden. Insolvency rates in England and Wales remain high.

UK borrowing costs rise faster than the US, where President Trump’s tax plans impact markets. US Treasury yields increase after Senate approval of a significant bill. The bill is expected to add trillions to America’s federal deficit. Financial markets are closely monitoring developments in both countries.

Read more at Yahoo Finance: Borrowing costs surge on speculation over Reeves’s future