Reeves Cost-of-Living Package Holds on MP-Continuity Signal Into Sunday London Summit
Chancellor Rachel Reeves’s cost-of-living package holds through the Sunday London Russia summit on the Friday MP lobbying report that Andy Burnham is considering keeping her as Chancellor under any Burnham premiership scenario. The structural continuity signal materially eases the gilt-market positioning for the leadership-transition risk. UK 10-year gilt yields closed Friday at the 5.00% line; Brent crude eased to $95.80 but the Sunday Asia open is the pivot point if Hormuz remains closed and the US-Iran strikes continue.
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 trajectory points to a price-cap rise. The Bank of England MPC’s rate-cut path is uncertain; the next decision in just over a week is the binding macro variable. The Burnham-Reeves continuity signal reported Friday is the most significant single positive development for gilt-market positioning on the leadership-transition front since the leadership question opened.