UK bond yields rise sharply amid speculation over future of Rachel Reeves

Cost of government borrowing leaps as investors take fright from PMQs, before falling back as No 10 says chancellor staying in post

• Reeves will stay as chancellor, says No 10 after her tears in Commons

• Where does the welfare bill climbdown leave UK public finances?

UK government borrowing costs have risen sharply amid speculation over Rachel Reeves's position as chancellor, as City investors warned Labour's welfare U-turn had blown a multibillion-pound hole in the public finances.

After Keir Starmer failed initially to give his full backing to a tearful chancellor at prime minister's questions on Wednesday, the yield on 10-year UK government bonds, also known as gilts, was on course for the biggest jump in a day since Liz Truss was in No 10, while the pound slumped.