Increased demand for UK government bonds helps maintain a lower political risk premium.

James Smith and Michiel Tukker of ING pointed out in a report that increased demand for UK government bonds (i.e., gilts) helps to maintain a lower political risk premium. They stated that, due to slowing UK inflation and the increased likelihood of the Bank of England cutting interest rates in the coming months, investors are optimistic about gilts. According to Tradeweb data, the yield on 10-year gilts fell by 2.1 basis points to a latest traded price of 4.294%. Investors are awaiting the results of Thursday's by-elections in the Gordon and Denton constituencies, the outcome of which could influence the UK's political landscape in the coming months.