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Business — Graeme Wearden
Newsflash: Ride sharing, food delivery and robotaxi group Uber is cutting 10% of its staff, Bloomberg are reporting .
The cuts will wipe out around 3,300 roles, in a massive restructuring aimed at reducing management layers and reallocating spending.
Chief executive officer Dara Khosrowshahi announced the changes in an email obtained by Bloomberg News, saying that Uber’s growth in recent years has created “more layers, more coordination, more fragmented ownership, and in some cases structures that made sense when businesses were smaller but no longer serve us well at our current scale.”
Over in parliament, prime minister Andy Burnham has pledged to stick the UK’s fiscal rules, as the UK tries to calm the bond markets.
Burnham was asked about about the rise in government borrowing to an 18-year high, and the concerns voiced by Lord O’Neill last night ( see opening post ).
Burnham replied that he and Jim O’Neill had worked together in Manchester to stimulate its economy.
Reminding MPs about the chaos of Liz Truss’s administration, Burnham suggested that the turbulence on global markets is due to the exposure which the then-governing Conservative party left behind.
He says the Labour government is turning the corner, with the fastest growth in the G7 this year, and cutting the UK deficit faster than any other G7 country.
This will be a government grounded in fiscal responsibity, it will stick to the fiscal rules.
But at the same time we will help reduce cost of living pressures on our constituents.
My colleague Andy Sparrow is live-blogging all the action from PMQs:
Related: Andy Burnham faces Kemi Badenoch at first PMQs – UK politics live
O’Neill: bond markets would like to see action on 'excesses of the triple lock'
Economist Lord Jim O ’ Neill has hinted that the government could rein in the pension triple lock to placate the bond markets.
Speaking to Times Radio, Lord O’Neill argued the Budget would have to include either spending cuts or “some form of tax increases” in order to restore the Government’s “headroom”.
Lord O ’ Neill suggested the bond markets would “respond favourably” to a Government that takes “credible action to deal with the excesses of the triple lock or the excesses of welfare spending”.
As we reported last night , the bond market sell-off could wipe out half of chancellor John Healey’s headroom to keep within the UK’s fiscal rules.
The bond market sell-off could prompt the Bank of England (BoE) to reconsider whether to continue with its own sale of UK government debt.
The BoE is due to decide later this month whether to maintain its ‘ quantitative tightening ’ programme, or slow it down.
QT involves the sale of UK gilts which the BoE bought to stimulate the economy after the 2008 financial crisis and the Covid-19 pandemic. It is controversial as the Bank is making a loss, by selling bonds for less than the value it paid for them under ‘ quantitative easing’.
Professor Costas Milas, of the University of Liverpool’s management school, explains why the Bank might slow the pace of QT:
The ongoing global shock is indeed a challenge for Burnham as it puts firmly the focus on his fiscal intentions and whether next month’s Budget will raise taxes without doing much ( or anything) about lowering government expenditure. But let us not forget that the BoE’s policymakers will also decide in mid-September on UK interest rates and Quantitative Tightening (QT; or sales of government bonds) for the next 12 months.
With UK (and global) yields on the rise and Scott Bessent authorizing a buyback of U.S. debt to suppress, as much as he can, US yields, it will look very odd if the BoE’s policymakers decided to continue aggressively with QT action…
Competition watchdog takes a look at E.ON/Ovo deal
A deal to create the UK’s biggest energy supplier is to be probed by competition regulators.
The Competition and Markets Authority has announced it will start investigating the takeover of UK energy firm Ovo by German rival E.ON.
That deal, announced in May , would create a combined company with about 9.6m customers.
The CMA will now decide whether the deal could lead to a substantial lessening of competition, which could prompt a more detailed “Phase Two” investigation.
Charts: Borrowing costs and oil price rising
Here’s a chart showing how UK borrowing costs have risen again today:
The US dollar has climbed to its highest level against a basket of other currencies in over two weeks today.
Traders are betting that the US Federal Reserve is more likely to raise interest rates at its next meeting in September, after Fed chair Kevin Warsh warned last week that there would be “work to do” unless inflation eases.
Related: Fed chair says delivering ‘stable prices’ is central bank’s job as inflation persists
This has pushed the pound down below $1.35, for the first time since 14 August.
The euro has dipped to $1.1575, the lowest since 18 August.
Bond sell-off is headache for Burnham and Healey
More investors and economists are warning that the bond market turmoil creates headaches for prime minister Andy Burnham and chancellor John Healey.
Daniel Mahoney , senior uk economist at Handelsbanken , warns that it could lead to tax rises in the budget:
“The 10-year gilt yield has hit levels last seen during the Global Financial Crisis. Recent drivers of increasing gilt yields have been broadly international – including geopolitical risk and competition for investor capital in the context of the AI boom – but it continues to be a major concern that UK government borrowing costs remain notably higher than G7 counterparts.
“If geopolitical risk recedes later this year, as we currently project, we do expect to see some easing of gilt yields in the future. Moreover, the spread between gilt yields and other G7 sovereign debt yields may end up narrowing next year as political risk rises up the agenda in continental Europe. But current moves in financial markets are clearly set to further erode the Government’s fiscal headroom at the upcoming Budget, adding to the likelihood that fresh tax increases will be announced on 28th October.”
Matthew Amis , investment director for rates management at Aberdeen Investments , agrees that the government is rather hemmed in:
“Gilts played catch-up with European peers yesterday after Monday’s bank holiday. The summer holidays are over and yet the Iranian conflict is still no closer to a resolution. Tensions in the Middle East increased again last night, as such both oil and natural gas moved higher. Uk 10 Year gilt yields are up over 10bps this week.
“At the front end of the UK curve, markets are now pricing in three hikes from the Bank of England over the next year. Gilt yields look elevated here but until oil and gas start freely moving in the Straits of Hormuz, gilt yields are going to struggle. On the politics front, PM Burnham delivered his maiden speech to parliament yesterday. From a gilt market perspective, I don’t think we learnt anything new. But what is clear is with gilt yields at these levels, the fiscal room for manoeuvre going into October’s budget is incredibly limited.”
UK and European gas prices hit highest since January 2023
European gas prices have hit their highest level since January 2023 this morning, as the Iran war drives up energy costs.
The benchmark Dutch gas contact touching a 43-month high of €75.325/MWh this morning.
The month-ahead UK gas price also hit its highest level since January 2023, at 184p per therm.
This will make it increasingly expensive for European countries to stock up on gas ahead of the winter – at a time when EU gas stores are at their lowest level in 13 years
Related: ‘Winter panic’: EU gas stores at their lowest level in 13 years
“The market had hoped that the U.S. and Iran would be able to reach some sort of agreement, that allowed Hormuz to reopen, but is now starting to price in a long-lasting closure of the Strait and a very bad supply situation ahead of the upcoming heating season.”
London bus strikes postponed after ‘significantly improved offer’
Away from the bond markets, London bus strikes scheduled for this weekend have been postponed after workers received a “significantly improved offer”.
Members of Unite working for Arriva North London had been due to walk out on Friday, in protest over working conditions in the heatwave.
Related: Andy Burnham has barely acknowledged the climate crisis. If only Britain’s workers had that luxury | John Harris
The strike threatened disruption to services at dozens of routes in the capital.
Instead, workers will now be balloted on an improved offer.
Unite general secretary Sharon Graham said:
“Unite is determined that the conditions of bus drivers are improved in London and beyond.
“We expect bus operators to treat workers with dignity and respect and will be ensuring that this happens.”
The Guardian reported last month that many drivers are concerned that proposals to improve the air-conditioning system across Arriva North London’s fleet of 730 buses may not be finished by next summer.
Related: London bus drivers resume strike over heatwave working amid fears over air con deal
Uh oh. Investment bank Jefferies is cutting its appetite for risk, due to the jump in bond yields and the ongoing US-Iran war.
We are toning down our risk view by a notch.
Rates are reaching a level where a further selloff in rates would be increasingly negative for both equities and credit. Unfortunately, we do not see an immediate catalyst that would bring rates materially lower from current levels.
There is no easy way out of the Iran war. We still remain optimistic that we would get a deal before the mid terms, but we do not think we are at the pain points where either US or Iran would agree to a deal.
Shares have dipped in London in early trading, pulling the FTSE 100 index of blue-chip equities down by 39 points, or 0.36%.
Technology and services provider Computacenter are the top faller, down 3.5%, followed by sports and leisure-wear retailer JD Sports (-2%).
The bond market turmoil means the UK faces ‘even more complicated’ choices ahead of the autumn budget, points out Roger Lee , head of equity strategy at Cavendish .
“This latest series of US air strikes on Iran, and the inevitable retaliation, pushed oil prices to around $95/bbl, a five-week high.”
“Whilst this is very much a global sell off in government bonds focused on countries with high deficits and/or high absolute debt levels, given the UK’s fiscal position gilts are seen as especially exposed”
“Pressure in the bond market will amplify the UK’s fiscal challenges.”
“The current level of bond yields is likely to erode most of the previous headroom leaving new PM Andy Burnham with even more complicated budget choices in October.”
Why are the bond markets having a wobble?
Mike Goosay , CIO and global head of fixed income at Principal Asset Management , has summed-up the reasons behind the bond-market sell-off:
“The sharp rise in global bond yields reflects investors reassessing inflation risks, policy expectations, and the growing supply of government debt across major markets.
While markets are increasingly pricing the possibility of additional policy tightening, we believe higher long-term yields also reflect structural factors such as elevated issuance, ongoing fiscal financing needs, and a rise in term premium.
“While today’s volatility may feel disruptive, it is also improving the long-term opportunity set across fixed income markets. Higher yields are enhancing both income and return potential, creating opportunities that have been largely absent for much of the past decade. For long-term investors, periods of market repricing can often present attractive entry points, particularly when economic and credit fundamentals remain as resilient as they do today.
Germany’s 10-year government bond yield has hit its highest level since April 2011; it’s currently up 3.8 basis points to 3.3763%.
That underlines that this is a global sell-off – with government bonds in the US, Japan, India and Australia, for example, all weakening.
UK borrowing costs hit highest since 2008 as sell-off continues.
Newsflash: UK government borrowing costs have jumped at the start of trading, as the bond market sell-off continues.
The yield, or interest rate, on UK 10-year bonds jumped by 4 basis points (0.04 of a percentage point) to 5.268%. That’s the highest since June 2008 ( Reuters reports ).
30-year UK bond yields also jumped 5bps to almost 5.89%, close to the highs seen yesterday.
Yields rise when bond prices fall, and are an indication of a country’s borrowing costs.
Although these are relatively small moves, they intensify the pressure on Andy Burnham’s government, eroding the amount of ‘fiscal headroom’ available to chancellor John Healey ahead of the autumn budget.
Joel Kruger , market strategist at LMAX Group , says the jump in the oil price today is driving bond yields higher:
“The dominant theme as markets open is the renewed escalation between the US and Iran, with attacks on Iranian military and tanker targets raising concerns over further disruption in the Strait of Hormuz.
Oil has extended to a six-week high, amplifying inflation concerns and driving another sharp rise in global bond yields
Related: The Guardian view on the global bond shock: Andy Burnham should take note | Editorial
There’s no sign that the bond market sell-off is stopping, warns Chris Beauchamp , chief market analyst at IG:
“The market rout stepped up a year yesterday and shows no sign of stopping.
Governments around the world are feeling the pressure from bond markets, but the situation is particularly acute for the UK, where Andy Burnham’s grand promises about reforming the economy are about to meet the cold reality of high debt levels and rocketing borrowing costs.
UK taxpayers face the likelihood of paying more for his grand ambitions, while also having to worry about a BoE rate hike that becomes more likely with each $1 on the price of oil.”
Ryanair cuts winter capacity and predicts jump in fares
Budget airline Ryanair has warned that airfares could jump next year if the oil price remains high.
Ryanair has cut its passenger traffic target for the current financial year, down from 216m customers to 214m, to help reduce its exposure to “unhedged winter oil” during the unprofitabe winter months.
The airline also predicted that “short haul airfares in Europe will increase materially to reflect higher oil prices” next year, unless crude prices drop, and claimed that some “less well-hedged competitors” might struggle to survive the winter.
IMF chief: increase in global interest rates is of particular concern
The head of the IMF has warned that the rise in bond yields among advanced economies threatens to cause economic pain for developing nations.
Kristalina Georgieva, managing director of the IMF, told the gathering of G20 finance ministers and central bank governors in North Carolina that the rise in global borrowing costs was a “particular concern”.
The sovereign debt landscape for emerging and low-income countries has gradually improved in recent years, thanks to domestic policy efforts and international cooperation. But progress has been uneven, and persistent risks and uncertainty in the global economy, including spillovers from the significant increase in yields in advanced economies, call for policy discipline and underscore the importance of building buffers.
The increase in global interest rates is of particular concern. As key advanced economy yields rise to multi-year highs, they lift most of the world’s yield curves up with them. In some emerging markets this more than fully offsets hard-won spread compression.
High refinancing needs and rising debt-service costs are constraining many developing economies, in particular low‑income countries, limiting their capacity to finance critical spending on infrastructure, health, and education, which undermines growth and, in turn, debt sustainability.
These challenges are compounded by a sharp decline in net external financing, including cuts in official development assistance, and a marked reduction in new inflows from non‑Paris Club creditors.
European stock markets are set to open lower, when trading begins in 40 minutes time.
Reuters reports that Eurostoxx 50 futures are down 0.36%, while Germany’s DAX index is on track for a 0.46% fall.
Oil has hit its highest level in almost six weeks today, after the US and Iran exchanged airstrikes.
Brent crude traded as high as $97 a barrel, for the first time since 24 July, having jumped by 4.6% yesterday.
Related: US and Iran exchange more airstrikes, fuelling fears of wider return to hostilities
That risks adding to the inflationary pressures that have been pushing bond yields higher.
“Developments in recent days brought risks to regional oil supplies back into focus ... We’ve seen oil flow through the Strait of Hormuz despite the stalemate between the US and Iran, but rising tensions clearly put crossings at risk.”
Australia's borrowing costs hit 15-year high
Australia’s 10-year government bond have risen to their highest level in over 15 years, Reuters reports.
The yield (or interest rate) on 10-year Australian debt has hit 5.22% today, amid the global sell-off in government debt.
India's 10-year bond yield tops 7% amid debt sell-off
The yield on Indian 10-year government bonds briefly hit 7% on Wednesday, for the first time in three months, Reuters reports
Introduction: Asia-Pacific markets slide after global bond sell-off
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
There’s no let-up in the market turmoil which gripped investors yesterday, as government borrowing costs around the world hit their highest level in years.
Shares are sliding in Asia-Pacific markets today, as renewed clashes between the US and Iran drive up the oil price.
In Tokyo, the Nikkei 225 share index has slumped by 2.7% today. China’s markets are in the red too, with the CSI 300 losing 1.4%, while South Korea’s KOSPI has dropped by 3.3%.
Last night, Wall Street ended lower too – with the Russell 2000 index of smaller US companies dropping by 1.2%.
This follows a day of bond market turmoil on Tuesday, which saw the UK’s long-term borrowing costs jumped to their highest level since early 1998, while Japan’s 10-year bond yield hit its highest level since 1996.
Sovereign bond yields appear to be being pushed up by three factors – worries about rising inflation, concerns about government spending levels, and competition with AI companies who are also borrowing heavily.
As Jim Reid , market strategist at Deutsche Bank , puts it:
As meteorological autumn begun yesterday, a chill swept through markets as rising geopolitical risk, oil prices and bond yields created a risk off start to September.
Rising bond yields push up a government’s borrowing costs – and risk eating into the new UK chancellor’s fiscal headroom, making it harder to afford new spending pledges in the upcoming budget.
Related: UK long-term borrowing costs could halve chancellor’s budget headroom
Last night, Lord Jim O’Neill warned that UK mortgage rates are “going up” unless the bond markets cool.
Lord O’Neill told LBC’s Andrew Marr it had been a “tough day”, explaining:
10-year gilt yields or 10-year interest rates have risen by a quarter of a percent, which in one day is a lot. We’ve not had that since Liz Truss days…
Lord O’Neill , who has turned down a role in Andy Burnham’s government, expained that investors want to see signs that the UK has a “sensible fiscal strategy”, adding:
When I woke up this morning I thought ‘uh oh this is going to be tough’. I didn’t think it’d be quite this tough but it’s been a tough day.’
9.30am: ONS Mergers and Acquisitions involving UK companies: April to June 2026
The cuts will wipe out around 3,300 roles, in a massive restructuring aimed at reducing management layers and reallocating spending.
This report is published with credit to theguardian.com. Full available text from the wire is above. Read on theguardian.com →
Source: theguardian.com · Graeme Wearden. Published 2 Sept 2026, 11:36 am.
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