02.07.202516:06:33UTC+00UK Stocks Fall on Reeves Speculation

On Wednesday, the FTSE 100 saw a decline as UK markets were shaken by the political uncertainty surrounding Chancellor Rachel Reeves. This came after Prime Minister Keir Starmer failed to provide a firm endorsement of Reeves during Prime Minister’s Questions, fueling speculation regarding her tenure. This uncertainty gave way to a notable uptick in gilt yields—the largest seen since April—and spurred a substantial depreciation of the pound. Although Starmer later affirmed his support for Reeves, the market had already reacted. Rate-sensitive sectors bore the brunt of the sell-off, with homebuilders, real estate companies, and banks experiencing significant declines. Berkeley shares dropped by over 8%, Persimmon by more than 6%, while Marks & Spencer, Barratt Developments, Redrow, and Land Securities saw decreases exceeding 5%. Additionally, Lloyds Banking Group fell by over 3%, and Barclays by more than 1%. Rising bond yields coupled with diminished expectations for Bank of England rate cuts further intensified pressure on these sectors. Conversely, miners provided some stability to the broader index, as Rio Tinto, Glencore, and Anglo American enjoyed gains ranging from 2.5% to 5.2%.