LONDON, ENGLAND - JULY 9: British Prime Minister Sir Keir Starmer hosts the first roundtable of regional English mayors with Andy Burnham (R) Mayor of Greater Manchester, at Downing Street on July 9, 2024 in London, England. Sir Keir Starmer hosted the first roundtable with metro mayors from 11 regions across England. (Photo by Ian Vogler - WPA Pool/Getty Images)

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LONDON — U.K. gilts and sterling have come under increasing pressure, amid fears a new left-leaning prime minister will challenge the country's fiscal discipline and take up a confrontational stance towards bond markets.

Investors on Friday were reacting as hurdles were cleared for a challenge to Keir Starmer's premiership from Labour Party rival Andy Burnham, with selling pressure intensifying.

It came as U.S.…