Greens captured Gorton in a by‑election, taking the seat from Labour and denting Starmer’s authority. Some Labour MPs urged a shift left, but the leadership signalled no change. The PM vowed to counter “extremes” as parties assess the result’s implications for strategy.

UK gilt sales are expected to decline for the first time since 2023, easing borrowing costs and giving Reeves a modest fiscal boost. Banks see lower issuance and yields, while the Treasury signals continued discipline to avoid any perception of a licence to spend.

Investors are rotating into asset-heavy shares as anxiety over AI’s disruptive impact hits software valuations. Utilities, energy and shipping gained on demand for dependable cashflows, while roughly $1.2tn was wiped from software stocks in a sharp Wall St sell-off.

Lord Mandelson has been arrested on suspicion of misconduct in public office as the Met investigates his dealings linked to Jeffrey Epstein. The inquiry follows newly released US files and claims he leaked confidential information. He denies wrongdoing.