Mark Filipino hosts this Financial Times news briefing covering major market developments on Wednesday, May 13th. The episode features FT Senior Markets Correspondent Ian Smith discussing UK bond market turmoil and FT US Economics Editor Claire Jones analyzing inflation impacts from the Iran war.

Key topics include UK gilt investors pressuring Prime Minister Keir Starmer through bond sell-offs, US inflation jumping to 3.8% due to higher fuel costs, Blue Owl's dramatic funding decline, and eBay's rejection of GameStop's hostile takeover attempt.

UK Bond Vigilantes Target Starmer's Leadership

UK 30-year gilt yields reached their highest level since 1998 as bond vigilantes pressure Prime Minister Keir Starmer amid mounting calls for his resignation

The UK spends over £100 billion annually just servicing its long-term debt, making investors highly sensitive to any potential increase in future borrowing

Nine out of ten bond fund managers surveyed prefer Health Secretary Wes Streeting as the most market-friendly replacement for Starmer

Andy Burnham, mayor of Greater Manchester and bookies' favorite, is viewed as most market-unfriendly after saying government should not be 'in hock to the bond market'

Blue Owl Faces Severe Liquidity Crisis

Blue Owl's largest fund reported just $26 million in new investments on May 1st, representing a 95% decrease from the same period last year

Investors requested to redeem over 20% of their cash from the fund earlier this year, forcing Blue Owl to partially limit redemptions

The dramatic decline reflects broader private credit concerns about AI's impact on software companies, where private markets have significant exposure

Iran War Drives US Inflation to Multi-Year High

US inflation jumped to 3.8% in the latest month, up from 2.4% in February before the Iran war began, reaching the highest level since 2023

"Since the Iran war began, households spent about $37.9 billion extra on gas as a result of the conflict" - Claire Jones, citing Brown University tracker data

Fuel prices have risen by more than half since the conflict erupted, with impacts expected to spread to food prices through higher transportation and fertilizer costs

Economists predict approximately $200 billion in lost US economic output due to the Federal Reserve delaying planned interest rate cuts

eBay Rejects GameStop's Hostile Takeover Bid

eBay rejected GameStop's $56 billion unsolicited takeover offer, citing concerns over deal risks, GameStop's governance, and financing structure

The rejection could prompt GameStop CEO Ryan Cohen to launch a hostile bid by taking the offer directly to eBay shareholders

eBay is valued at four times GameStop's market capitalization, highlighting the ambitious nature of the proposed acquisition