The UK 10-year gilt yield fell to 4.736%, extending declines for a third session to an over two-month low, as weaker UK flash PMI data reinforced expectations of slower economic momentum and reduced the likelihood of Bank of England rate hikes. Political uncertainty also eased after Prime Minister Keir Starmer announced his resignation, with Andy Burnham emerging as the leading candidate to replace him. Attention now turns to Burnham’s potential policy agenda, cabinet choices and the implications for public finances. If no major challenger emerges, Burnham could take office as early as July 17. Meanwhile, June PMI data showed the UK economy remained under pressure, with the composite index falling to 49.4, below expectations and signalling contraction for a second consecutive month. Services activity weakened, while manufacturing held up better. Rising input costs and persistent services inflation remain key concerns for the Bank of England.