Gilt traders warn that Thursday’s regional elections could hand Labour a crushing defeat, sparking a “swing to the left” that would tighten already‑high borrowing costs. Polls show the party may surrender more than 1,000 seats to the Greens and Reform across Scotland, England and Wales. A leftward shift would tighten fiscal rules and raise doubts about Prime Minister Keir Starmer’s grip.

The 30‑year gilt yield now sits at nearly 5.7%, close to its century‑high, after a 10‑year debt issue fetched just above 4.91% – the steepest since 2008. A‑list traders such as Iain Buckle (Aegon) and Matthias Scheiber (Allspring) say any populist surge could push yields higher, while estimates suggest a Burnham‑led government might add £50bn to issuance forecasts.

Bond markets have already priced in a sell‑off in gilts and the pound whenever Starmer’s tenure looks shaky. Should the Greens perform strongly, analysts fear a “disastrous” fiscal outlook that could trigger a sudden yield spike. Investors therefore brace for volatility, with the next few days likely to decide whether gilt prices stabilise or tumble further, to market participants and fiscal policymakers.