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What happened
UK bond yields increased following Prime Minister Keir Starmer's cabinet reshuffle, raising concerns about inflation and potential gilt issuance. The market reacted negatively, with the bond yield spread between the UK and G7 countries widening. Meanwhile, the UK manufacturing sector continued to contract for the 11th consecutive month, and Royal Mail reported a modest profit amid challenging conditions.
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Key insights
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1
Bond Yield Spread Widening: The bond yield spread between the UK and G7 countries has increased, indicating market concerns.
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2
Manufacturing Sector Struggles: The UK manufacturing sector has contracted for 11 months, reflecting weak demand and uncertainty.
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3
Royal Mail's Profit Report: Royal Mail reported a £12 million profit, its first in three years, despite ongoing challenges.
Takeaways
The reshuffle and economic indicators suggest a challenging environment for the UK economy.