Kmflett's Blog

With the possibility of a new Labour leader and Prime Minister the Financial Times has checked what the Bond Markets think.

We do of course live in a market economy but in recent times this has become more of a market society, where not elections and Parliament decide what happens but a small group of unelected and unaccountable market traders.

Of course the Liz Truss Premiership, where an attempt was made to restructure capitalism without the social basis for it failed in short order.

When it comes to potential contenders for the Labour leadership the concern seems to be with Andy Burnham and Angela Rayner. Yet both are moderate social democrats who would do no more than tweak things here and there, hopefully for the modest benefit of the many not the few. That may be optimistic.

According to the FT (14th May 2026) even that is too much

‘Andy Burnham represents the biggest threat to the gilt market among the frontrunners to replace (Starmer) with Wes Streeting the least risky option’

‘the market worries quite a lot about Burnham’ said one leading gilt investor pointing to his comments last year that the country should not be ‘in hock’ to the bond market’

Nine out of ten picked Streeting as the most market friendly option.

The FT Editorial (15th May 2026) returned to the theme

“At a time when politicians are failing to cut spending and deliver credible growth strategies – while stoking instability with political infighting and a blasé attitude towards fiscal discipline – the bond market is acting as the rare adult in the room. Potential challengers seeking to defy it would do so at Britain’s peril.”

There should be trouble ahead but only if grassroots unions and communities demand a different agenda to that the Bond Markets want