UK Markets Rebound Amid Starmer, Reeves Fiscal Pledge

UK financial markets rebounded on Thursday after Prime Minister Keir Starmer and Chancellor Rachel Reeves publicly reaffirmed their commitment to fiscal discipline, easing investor concerns following earlier market volatility. Starmer's explicit show of support for Reeves, amid prior speculation about her position, contributed to the stabilization of the pound and gilt yields, with the FTSE 100 and other equities advancing. Robust private sector and services data further lifted sentiment, while Lloyds Banking, Barclays, and Currys saw notable gains. AstraZeneca shares declined due to news of a potential multi-billion dollar licensing deal with Summit Therapeutics. Despite the recovery, investors remain wary of the government's fiscal prospects after welfare reform compromises, which could prompt tax increases or spending cuts. Markets are also anticipating a Bank of England interest rate cut in August.