UK borrowing costs hold close to three-decade high after Labour election blow

LONDON, May ⁠8 (Reuters) - British government ​bond prices were little changed on Friday with long-term ​borrowing ‌costs hovering close to their highest level in ⁠nearly 30 years after early results ⁠of local elections ​showed Keir Starmer's Labour Party suffered heavy losses.

The yield on 30-year gilts, which this week hit their ​highest ‌since 1998 on worries about a possible change in leadership of the government and its borrowing plans, as well the impact ​of the Iran war, was unchanged at ‌5.632%.

"As the local election results roll in, it’s not looking good for ‌Labour, and the potential for a leadership change is undermining confidence in the UK's fiscal ​health," Derren Nathan, head of equity research at investment firm ‌Hargreaves Lansdown, said.

Yields on gilts ranging from two to 20 years in duration were also flat.

British ⁠government ⁠borrowing costs have risen more ‌sharply than those of other European governments since the start ​of ​the Iran war on worries about ‌the country's reliance on natural gas for its power generation and home heating.