FTSE 100 Live: Gilt yields surge over Starmer fears; Intel, Pinterest shares rocket

Good morning and welcome back to the City AM liveblog.

Gilt yields have risen to their highest rate in nearly thirty years, as markets weigh up the prospect of an ousted Keir Starmer and lurch to a more left-wing government that might follow.

The yield on 30-year government bonds rose 11 basis points on Tuesday to hit 5.76 per cent, topping the 27-year high suffered by the government late last year.

Markets have in recent weeks been preparing for the possibility of a new Prime Minister, as contenders line up mostly on Starmer’s left and include former deputy prime minister Angela Rayner, energy secretary Ed Miliband and Manchester mayor Andy Burnham.

The UK’s gilt markets remain scarred by the Liz Truss mini-Budget in 2022, which remains a “benchmark” for their ability to question the fiscal credibility of government, DeVere group chief executive Nigel Green said.

“The combination of a potentially massive electoral setback, an organised push against Starmer, and questions over how firmly Reeves can hold the fiscal line creates a clear risk signal for UK bond markets,” he said.

Back to the current Labour government, and it has emerged that Chancellor Rachel Reeves exchanged some choice words with Scott Bessent, her US counterpart, over the war in Iran.

HSBC was the FTSE 100’s biggest faller on Tuesday’s open, as the banking giant took a $400m fraud-related credit charge and missed its profit target.

The bank has priced in a $300m hit from the Middle East conflict and saw profit fall by $1.3bn (£961m).

US tech firm Palantir rocketed past analyst forecasts to post $1.6bn (£1.2bn) in revenue, as the AI-powered firm ramps up its deals with governments, including here in the UK.

The tech firm’s partnerships with the NHS and the Ministry of Defence have seen it be dragged into political spates – including with Greens leader Zack Polanski – and these debates are sure to continue as Palantir rakes in new deals.

We’ll be bringing you the latest as it unfolds.

Here’s a few of our top stories on Tuesday

• ‘Clear risk signal’: Gilt yields hit 28-year high as investors weigh Starmer’s future
• Jim Ratcliffe warns Britain’s energy policy is ‘all over the place’
• Controversial £2bn packaging tax could be scrapped as food inflation looms
• Trump officials claim Iran is ‘weaponising global trade’
• Motor finance provider faces administration amid £9bn redress fallout