Reeves Cost-of-Living Package Heads Into Weekend on Burnham-Continuity MP Signal
Chancellor Rachel Reeves’s cost-of-living package heads into the weekend on the MP lobbying report that Andy Burnham is considering keeping her as Chancellor in any Burnham premiership scenario. The structural continuity signal materially eases the gilt-market positioning for the Burnham leadership-transition risk. UK 10-year gilt yields closed Friday at the 5.00% line; Brent eased to $95.80 but the overnight US-Iran strikes could re-engage the Brent above $95-100 trajectory through the Sunday Asia open.
The 5p fuel-duty extension cancellation is locked until 31 December 2026. Inflation has slowed to 2.8% — the lowest in over a year — but Brent staying in the $95-100 range will start to reverse the inflation-easing path through the second half of 2026. The October Ofgem price-cap reset depends on Brent staying in the $88-95 range through mid-summer; the current $95.80-and-rising trajectory points to a price-cap rise. The Bank of England MPC’s rate-cut path is uncertain. The Burnham-Reeves continuity signal reported Friday is the most significant single positive development for the gilt market on the leadership-transition front since the leadership question opened.