7 resultsfor “political instability effects on UK economy”
economy, and, in the past few days the prospects of more political instability around the raft of elections. The Labour Party is expected to lose hundreds of council seats, and face challenging national elections
effectively the interest rate – had [jumped earlier this week](https://www.theguardian.com/business/2026/may/05/uk-borrowing-costs-bond-yields-gilts-rachel-reeves), amid fears that the prime minister could face a leadership challenge if the results from the local elections and the devolved parliaments
economy in a way they haven’t been in my entire life.”  JD Vance speaks
effects of the Iran war. Relations with the UK's former best friend, the United States are worsening. It's against this backdrop that the UK's minister for EU relations, Nick Thomas-Symonds, told
instability was concerned. The UK’s relationship with Washington has become increasingly strained as the conflict continues, with Starmer heavily criticised and at times [mocked by Trump](https://www.theguardian.com/us-news/2026/apr/03/trump-claims-starmer-weak-mocks-pm-uk-aircraft-carriers-iran-war) for not committing British equipment
effect the interest rate – on 30-year government bonds, or gilts, briefly reached 5.8% on Tuesday, [the highest level since 1998](https://www.theguardian.com/business/2026/may/12/uk-borrowing-costs-keir-starmer-bond-yields-pound-dollar-labour), before slipping back after a challenge failed to immediately materialise. However
economy, already crippled by the war, was dependent on exporting oil to the rest of the world through it. In November 1986, when Iran struck Kuwait’s ships, Kuwait asked for foreign help. The former