Rising oil prices as a result of renewed hostilities in the Iran war, and fears of further escalation in the conflict, have sustained pressure on bond yields, which are effectively the interest rate in the markets.

In the UK, the yield on 10-year gilts stretched to 5.24% from 5.22% on Tuesday, while the 30-year hit 5.87%, up from 5.85%. And the trend could quickly trickle down into Britain's mortgage market, reports the Sky News Money blog, thrusting more pressure upon household finances.

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Kathleen Brooks, research director at XTB, painted a grim picture of the country's fiscal position, describing it as "deeply uncomfortable".

She said: "Added to this, the interest rate futures market is pricing in more than three rate hikes between now and July, which could add significant pain to households.

"The first hike could be in November, with UK interest rates expected to reach 4.26% by February next year."

A 'major challenge' for PM

The surge in borrowing costs comes just weeks before Chancellor John Healey is due to deliver his first budget and could have implications on Andy Burnham's spending plans.

The prime minister has made clear his intentions to spend big on priorities such as the cost of living and defence; however, Ms Brooks said the rise in bond yields poses a "major challenge" for the government.

"Every basis point increase in the cost of borrowing in the UK adds to debt servicing costs, which need to be paid by the public purse," she said.

"Since the spring, the UK's interest-only bill has risen by up to £6bn by the end of this parliament. This is a large hole for the chancellor to fill next month."

The budget is due to be delivered on 28 October.

Burnham won't rule out tax rises

At his first PMQs as prime minister on Wednesday, Mr Burnham refused to rule out future tax rises to help fund his pledges.

Pushed by Conservative leader Kemi Badenoch on his plans, he said: "I've already indicated my first moves were to cut tax, but I'm not going to do what any prime minister has done and write the budget here.

"I can also say to her that he [Chancellor John Healey] and I took a deliberate decision to set an early date for the budget so that we reduce the period for prolonged speculation of the kind that she is wanting us to indulge in today."

The PM did, however, commit to spending 3% of GDP on defence by 2030, saying: "I've made that commitment, made it very clear, and I have done for a considerable period of time."

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Fiscal responsibility 'essential'

Speaking to Sky's Cathy Newman Show on Wednesday, Bridget Phillipson, the Labour Party chair and minister for women and equalities, admitted that "global factors" were causing "significant economic headwinds".

She insisted it was the government's responsibility to ensure the UK has a "strong economy from which we can invest in our public services".

Ms Phillipson said: "John Healey has made very clear that our approach on fiscal discipline and having a budget that allows us to invest in our country's future, but does maintain credibility where it comes to investors, is critical for any government."

She said that, ahead of the budget, she would not be "engaging in speculation" over possible tax rises, adding that the chancellor had been "clear that fiscal responsibility is essential" amid current "challenges".

Police said the suspected shooter was also dead after gunfire was heard at an apartment building near the city's convention centre at around 4.30pm local time on Wednesday.

Police sergeant Garrett Parten told a news conference one of the victims had died at the scene and another had died after being taken to hospital. Three officers were among the injured, he said.

"This is a tremendously tragic event, and our thoughts and prayers are with the families, the loved ones of those who lost their lives, those who were injured and with the injured officers and their families," he added.

He said it was not immediately clear how the shooter had died.

Seven people were earlier confirmed to have been taken to the Hennepin County Medical Center.

Footage on social media had shown police officers aiming rifles upwards towards an apartment tower block, with one witness reporting that dozens of shots were fired.

Minnesota's governor, Tim Walz, said he was "praying for our first responders". Emergency services on the scene included armoured vehicles and SWAT-style officers.

The FBI also assisted with the response, said agency director Kash Patel.

'Multiple officers' entered the building

A witness told local news station KARE, an affiliate of Sky's US partner network NBC, she "probably heard 25 to 30 shots over the course of the incident".

She said she was walking downstairs into the lobby of the high-rise building when she heard gunshots and saw "somebody that was down".

Upon leaving the building, she "heard lots more shots".

"Once I was finally outside of the building, I probably heard 25 to 30 shots – because there were multiple officers who had [...] entered," she added.

'I could tell he was trouble'

Julius Bailey told the Associated Press he was sitting outside the building when he heard gunfire ring out. He said he recognised the gunman as a resident of the apartment block.

He claimed the man was known for showing off his pistol and had been trying to avoid him.

"I could tell he was trouble," he said.

Police said a man, 34, had been arrested on suspicion of murder following the alleged attack in Albufeira, in the Algarve, on Tuesday evening.

Officers said a young boy had also been injured during the incident and taken to hospital.

A family court in Portugal is due to decide whether the child can stay with relatives or will be taken into care for the time being.

An investigation has been launched by detectives, police added.

A spokesperson for the foreign office said: "We are supporting the family of a British woman who has died in Portugal and are in contact with the local authorities."

Albufeira is one of Portugal's most popular destinations for summer tourists, with large numbers of visitors drawn to its sandy beaches every year.

According to reports, the unnamed man - who is said to have links to the Government's Prevent anti-extremism programme - travelled to Somerset to try to contact the relatives of University of Nottingham undergraduate Barnaby Webber.

Barnaby, fellow 19-year-old student Grace O'Malley-Kumar and school caretaker Ian Coates were stabbed to death by paranoid schizophrenic Valdo Calocane during the attacks in June 2023.

In a statement on Wednesday, Barnaby's mother, Emma Webber, said her family had been "left completely in the dark" about the unnamed man and therefore had no opportunity to take steps to protect themselves.

Mrs Webber said the "revelations" were "yet another devastating example of the incompetence and institutional failure that has come to define the response of Nottinghamshire Police and the IOPC to our family".

She said: "We are told that a mentally ill man with a fixation on the Nottingham attacks, a history of concerning behaviour, and links to Prevent was able to travel to our hometown, actively seek out our family and the families of other victims, yet we were left completely in the dark.

"We were given no warning, no safeguarding advice, and no opportunity to take steps to protect ourselves, our workplaces, or our son Charlie's school."

Mrs Webber added: "For a family already living with the unimaginable trauma of losing Barnaby to a man who was known to services, known to have serious mental health issues, and known to present risks that were repeatedly missed, this latest revelation is utterly chilling.

"The idea that another individual displaying seemingly similar warning signs was able to travel across the country seeking us out, potentially visiting places connected to our family and our community, without us being told, is terrifying...

"What is perhaps most disturbing is that this information was not withheld for days or weeks, but for many months.

"During that time, officials were apparently discussing the matter internally, preparing profiles and consulting lawyers, while the families most directly affected remained uninformed and unprotected."

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The Times reported that the man also attended the GP surgery of Grace's father, Dr Sanjoy Kumar, but officers failed to tell bereaved families that they were being stalked and downplayed the risk the man posed, claiming he was reaching out to "offer his help".

Dr Kumar told the newspaper he was horrified to learn that the man, a patient at a mental health institution, was "known for violence, fixated on our case and seeking us out, yet we have not been given an official warning".

A Nottinghamshire Police spokesperson said: "We received a complaint and due to the nature of the complaint referred the matter to the IOPC on 24 August and are awaiting their response.

"Unfortunately, we cannot comment any further at this stage while an investigation is under way. We have updated the complainant throughout the process."

A spokesperson for the IOPC acknowledged a complaint from the families of Calocane's victims "about a potential witness who had tried to contact them" and said the watchdog was looking into the matter.

The investigation was launched in 2024 after a report was made that an officer had been subjected to racist behaviour by colleagues in December 2023.

As a result of the probe by GMP's Professional Standards Directorate, the six police officers and two former officers were found to have committed gross misconduct, while a further officer's actions amounted to misconduct.

The six were sacked without notice. The two former officers would have been dismissed if they still worked at GMP, the force said.

The actions of PC Demi Green, PC Heena Rani, PC Lucy Granby, PC Matthew Barlow, PC Matthew Hill, PC Mohammed Abid, former PC Jake Holt and former Officer A - who has been granted anonymity - amounted to gross misconduct, a panel found following misconduct proceedings.

They also found Sergeant Adrian Bick's actions amounted to misconduct, as there was no breach of the standard of equality and diversity. He was issued a written warning.

The panel heard how a female officer with African heritage - who has been granted anonymity - complained after her accent was mimicked by a group of officers.

She was also compared to a suspect with similar skin colour and PC Abid made a derogatory comment about her hair.

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Deputy Chief Constable Terry Woods said: "No officer or member of staff should have to come to work and experience discriminatory behaviour from the people they serve alongside. Everyone has the right to feel respected, valued and part of the same team with a shared commitment to serving our communities and keeping people safe.

"I would like to acknowledge the courage of the officer who came forward and reported these concerns.

"It is important that people have the confidence to speak up, knowing they will be listened to and supported.

"Since this investigation began, our Bury district has worked closely with officers, staff and community representatives to listen to concerns, take action, and ensure we remain a police service that our diverse communities can identify with and be proud of.

"Those conversations and relationships are vital in helping us build trust and confidence."