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What a trip to Chinese electric car company Xpeng's new headquarters shows about the automaker's international ambitions. View More

This report is from this week's CNBC's The China Connection newsletter, which brings you insights and analysis on what's driving the world's second-largest economy. You can subscribe here. The big story Cultural shifts are subtle yet fundamental for any company aiming to succeed beyond its home market.When I visited Chinese electric car company Xpeng's new headquarters in Guangzhou last week, what stood out wasn't just how shiny it was compared to the building I'd visited last year, but the fluency of its global mindset, down to the small details like accurate English translations in signs and presentations. It went beyond the cursory "innovation" banners often seen in China.Leaders of Xpeng's autonomous driving, robotics and flying car units each delivered 40-minute presentations entirely in English — including their decks — without any translation device. In conversation with reporters, Xpeng founder and CEO He Xiaopeng even declared a ten-year goal to generate half of the company's sales from outside China.He has reason to be upbeat. Xpeng notched 12 straight months of more than 30,000 deliveries each, and exported a small but growing number of cars: 29,000 in just three quarters. That was more than double what Xpeng shipped from a year earlier. Chinese electric car company Xpeng opened its new headquarters in Guangzhou, China, and most staff started working there in Nov. 2025.CNBC | Evelyn Cheng Xpeng's global ambitions reflect a broader trend across China. In the last year or so, overseas expansion has become a top priority for nearly every Chinese company — an eagerness that Joe Ngai, chairman of McKinsey Greater China, said he's never seen."It's astonishing what this phenomenon is," he said, noting that fierce competition in China is driving local companies to seek higher profit margins abroad. But he cautioned it won't be easy, and that local partnerships would be important.Overseas markets only accounted for 8% of total revenue for the 50 largest Chinese companies as of 2021, according to McKinsey. That is far below 31% in overseas revenue for the largest U.S. companies, the data showed. Finding traction I first learned about Xpeng on the sidelines of CNBC's East Tech West conference in 2018, when the Alibaba-backed startup touted its edge in autonomous driving and drew comparisons to Tesla.But Xpeng wasn't able to release regulator-approved driver-assist systems at scale for a few years yet. Deliveries averaged just over 10,000 a month in 2022, and dipped well below that in early 2023 while rivals surged ahead.At a small Xpeng event in Shanghai that I attended in March 2023, there were hints that the startup might have the tech — just not the product Chinese consumers wanted. The event speaker, Xinzhou Wu, head of autonomous driving, soon left to lead Nvidia's automotive chip business.It was also in early 2023 that Xpeng brought in veteran Great Wall Motor executive Fengying Wang as president to oversee product planning and sales. Her leadership, along with the launch of a more affordable Mona M03 car, helped spark the company's turnaround. Wang remains with Xpeng today."Of course, it's much better when [the electric car companies have an] English-language interface," said Nick Kolodko, a Shanghai-based auto influencer who has lived in China for over a decade. He noted how some Chinese EV startups in Europe had in-car AI assistants that didn't support local languages.He's since observed some Chinese automakers granting their overseas teams more control over the last 18 months or so, though he said there's still a gap with European rivals in shaping a compelling brand narrative.Critically for Xpeng, it secured a $700 million investment from German auto giant Volkswagen in July 2023. The two companies have gradually expanded the partnership to include technological development.Down the road, "Chinese EV makers can also take a lot of [intellectual property] fees from such [tech] collaboration," said George Chen, a partner at The Asia Group. "This will be significant because 30, 40 years ago, European carmakers and American carmakers [were] doing exactly the same thing in Chinese markets."For now, Xpeng is taking the first step beyond exporting cars and local production.The company opened its first European factory in Austria in August, and plans to produce tens of thousands of cars there next year, according to Brian Gu, co-president of Xpeng. A former JPMorgan executive, Gu has been with Xpeng since its early days and helped the startup build ties with Wall Street ahead of its U.S. and Hong Kong listings.Xpeng is set to release earnings on Monday. In the first half of 2025, Xpeng claimed to be the best-selling Chinese new-energy vehicle startup brand in Norway, France, Singapore and Israel."The whole overseas expansion of Chinese companies will be part of the global business landscape for the next five years," McKinsey's Ngai said, "and I have zero doubts about it." Top TV picks on CNBC watch nowVIDEO8:0008:00China's "Singles Day" is the biggest sales festival in the worldThe China Connection Weiwen Han, Bain & Co.'s Asia-Pacific retail practice leader, said China's sales "month" could surpass U.S. Cyber Week sales and continue to grow steadily. watch nowVIDEO3:1003:10Middle class consumers will be the principal engine of China's economy: Fred HuThe China Connection Fred Hu, Chairman and CEO of Primavera Capital, said China's economy will be in much better shape once consumer spending normalizes. watch nowVIDEO6:2706:27HSBC CEO: 'Asia is buying Asia', as most of the trade uncertainty is behind usThe China Connection Georges Elhedery, CEO of HSBC, discussed the impact of tariffs on global trade and added that China's economic rebalancing is a "welcome development." Need to know China's exports dip. Shipments of Chinese goods fell in October for the first time in more than a year as businesses slowed their ramp-up of orders to pre-empt tariffs.Uneasy U.S.-China truce. Beijing has formalized agreements to delay restrictions on certain rare-earth exports for a year.Luckin's second act. Jinyi Guo, CEO of Luckin Coffee, said the company is preparing to relist in the U.S. five years after an accounting scandal. It will face new Chinese IPO rules to do so. Quote of the week The one thing that was different from Xpeng AI day from its previous tech day, is that it is talking more about its ambition oversea as a brand, not just as a EV maker, because it is pushing out all these other physical AI products beyond just an electric vehicle.— Kevin Xu, founder and CIO of Interconnected Capital In the markets Chinese stock markets traded mixed following Tuesday's session on Wall Street, where investors sold off technology names and drove a rally in more risk-off parts of the market.Hong Kong's Hang Seng Index added 0.81%, while mainland's CSI 300 lost 0.13%.The offshore Chinese yuan last traded at 7.1189 against the dollar. Stock Chart IconStock chart iconThe performance of the Shanghai Composite over the past year. Coming up Nov. 13: Baidu holds annual conference with AI details expected; Tencent releases quarterly earningsNov. 14: China releases October retail sales, industrial production and investment data; Alibaba wraps up its extended Singles Day shopping eventNov. 17: Xpeng to release quarterly earningsNov. 18: Baidu, iQiyi to release quarterly results

Days after a deadly blast near Delhi's Red Fort, Gurugram police have asked societies to submit list of residents from Jammu and Kashmir and foreign nationals, while the paying guest (PG) accommodations have been asked to maintain a register of tenants and visitors. View More

Every weekday, the Investing Club releases the Homestretch; an actionable afternoon update just in time for the last hour of trading. View More

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks were mixed Wednesday as Wall Street hoped for an end to the government's record-breaking shutdown. The House is set for a final vote in the evening on the Senate-backed bill that could reopen the federal government. The Dow hit an all-time high earlier in the session. The S & P 500 and Nasdaq were under some pressure as tech lagged and investors rotated into sectors like health care and financials. Eli Lilly on Wednesday topped $1,000 per share for the first time while Goldman Sachs soared 3%. Both are Club holdings. Data centers: Anthropic plans to pour $50 billion into artificial intelligence infrastructure over the coming years. The investment, announced on Wednesday, will go into building data centers in New York and Texas first. The first locations are expected to go live next year, with more likely to follow. Anthropic said that the energy-intensive facilities should provide power for its AI tools and expand the Claude chatbot maker's research and development. Anthropic's commitment is good news for Club holdings GE Vernova , Eaton , and Dover, which all play a role in the data center buildout. GE Vernova manufactures the natural gas turbines used to support these facilities, while Eaton makes power management solutions to make them more efficient. Dover sells thermal connectors and heat exchangers for the sites, too. More AI data centers mean more demand for power solutions. Moving forward, it doesn't look like data center construction is slowing anytime soon. JPMorgan estimates that global data centers, AI infrastructure, and related power supplies will cost over $5 trillion between 2026 and 2030. Analysts described the demand for compute as "astronomical" in a Monday note to clients. To be sure, investors have had concerns about eye-watering valuations for AI-related names, which have caused a selloff in the tech sector on and off over the past week. Wall Street call: TD Cowen raised its Broadcom price target to $405 from $370 ahead of the company's earnings release next month. Analysts cited growing AI spend by hyperscalers, who have raised their forecasts for capital expenditures. OpenAI's flurry of investment deals, according to TD Cowen, played a role in the PT hike, as well. The ChatGPT maker has announced partnerships with Nvidia, Amazon , Microsoft , and Oracle , which are worth billions of dollars and will further expand computing capacity and secure more chips. The thought is that some of that spending will go to Broadcom's business. TD Cowen, however, argued that there will be a "high bar" this quarter for chipmakers like Broadcom, given the stock's premium on the assumption of unrelating demand for its custom chips. "We believe Broadcom is likely to deliver strong numbers but likewise believe this is well-understood," the analysts, who maintained a buy rating on shares, wrote. Moving forward, TD Cowen analysts said Broadcom stock will be driven by revenue expectations for the second half of 2026 and beyond. TD Cowen doesn't expect those expectations to change meaningfully during the Dec. 11 print. The firm did acknowledge the potential for a "wild card" update during the post-earnings conference call. Up next: Club holding Cisco Systems will post quarterly earnings after Wednesday's close. Fellow Club name Disney will report its quarter Thursday morning. Outside the portfolio, other notable releases before Thursday's open include Brookfield , JD.com , and Aegon . On Thursday evening, quarterly results from Applied Materials are on the docket. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Two lower federal courts have blocked President Trump from removing Lisa Cook as a governor of the Federal Reserve Board. View More

Lisa Cook, governor of the US Federal Reserve, at The Brookings Institute in Washington, DC, US, on Monday, Nov. 3, 2025. Aaron Schwartz | Bloomberg | Getty Images The Supreme Court said Wednesday that it will hear oral arguments in the case challenging President Donald Trump's authority to fire Federal Reserve Gov. Lisa Cook on Jan. 21.Trump said on Aug. 25 that he was firing Cook, one of seven Fed governors, citing claims that she committed mortgage fraud in connection with two residences that she owns.Cook, who denies any wrongdoing, filed a lawsuit seeking to block her removal.A federal district court judge in Washington, D.C., in early September ruled that Cook could not be fired from the board while her suit was pending. The U.S. Court of Appeals for the District of Columbia soon after upheld that ruling, leading Trump to ask the Supreme Court to rule on his power to fire her. Read more CNBC politics coverageDemocrats win big on Election Night in key racesZohran Mamdani wins New York City mayor's race, NBC News projectsDemocratic candidate Mikie Sherrill wins New Jersey governor's race, NBC News projectsDemocrats win Virginia governor, attorney general races, NBC News projectsSNAP update: Trump admin will pay 50% of food stamp benefits in November amid shutdownTrump says he has 'no idea who' Binance's CZ is after pardoning himTrump backtracks on attending Supreme Court tariffs case arguments In the initial ruling blocking Cook's removal, District Court Judge Jia Cobb wrote, "Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act's 'for cause' provision.""The best reading" of that provision is that legal cause for removing a Fed governor is limited to actions related to their "behavior in office," Cobb wrote.The allegations against Cook relate to conduct that predates her serving on the Fed.Solicitor General D. John Sauer, who is representing the Trump administration in the case, has argued in a filing with the Supreme Court that the president should be allowed to remove her while her suit is pending because she does not have "a Fifth Amendment property interest in her continued service as a Governor of the Federal Reserve System."Sauer also wrote that although the Federal Reserve Act rules out removal for "no reason at all, or for policy disagreement ... so long as the President identifies a cause, the determination of 'some cause relating to the conduct, ability, fitness, or competence of the officer' is within the President's unreviewable discretion."Trump tried to fire Cook, who is the first Black woman to serve on the Fed's Board of Governors, after months of unsuccessfully pressuring the board and Fed Chair Jerome Powell to lower interest rates.

Swiss sportswear company On blew past Wall Street's expectations as it pledged to offer no discounts during the holiday shopping season. View More

In this articleNKEONONFollow your favorite stocksCREATE FREE ACCOUNT Logo of Swiss shoemaker On is displayed in a shop in Zurich, Switzerland, Aug. 28, 2025. Denis Balibouse | Reuters On raised its full-year guidance for the third quarter in a row on Wednesday after the Swiss sportswear company posted another three months of double-digit growth, bucking a slowdown in the sneaker market. The company, known for its innovative approach to running shoes, is now expecting 2025 sales to reach 2.98 billion Swiss francs ($3.72 billion), up from its previous guidance of 2.91 billion francs, on a reported basis. On a constant currency basis, the company anticipates sales will grow 34% from the prior year, rising from its previous forecast of 31%. The forecast is slightly above the 2.97 billion francs analysts were expecting, according to LSEG. "Our focus on premium, on full-price sales, on innovation, on that intersection between performance and design is just resonating very strongly with the consumer, and it's really setting ourselves apart," CEO Martin Hoffmann told CNBC in an interview. "You see it in the results. We have strong top-line growth, we have a strong margin, so that shows that we stay fully committed to full-price sales, and this is across all our channels."Shares of On jumped more than 20% in morning trading Wednesday in New York.During its 2025 third quarter, the sportswear company beat Wall Street's expectations on the top and bottom lines. Here's how On performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:Earnings per share: 47 cents in francs adjusted vs. 25 cents expectedRevenue: 794 million francs vs. 763 million francs expectedLSEG updated the comparable adjusted earnings per share figure after this story was published to include earnings per share for both classes of the company's stock.The company's reported net income for the three-month period that ended Sept. 30 was 118.9 million francs, or 36 cents per class A share, compared with 30.5 million francs, or 9 cents per class A share, a year earlier.Excluding one-time items, On posted earnings of 43 cents per class A share.Sales rose to 794.4 million francs, up about 25% from roughly 636 million francs a year earlier. On's rosy results come as competitors like Nike and Hoka plan for either a sales decline or slowdown in growth, as discretionary spending stagnates and tariffs take a bite out of shoppers' wallets. In late September, Nike said it was expecting sales in its current quarter, which runs generally from early September to early December, to fall by a low single-digit percentage as it works to reignite innovation and streamline operations. Deckers, the parent company behind On's fellow buzzy footwear brand Hoka, trimmed its sales guidance for Hoka in October.  watch nowVIDEO4:0504:05How On creates its spray-on running shoesRetail Meanwhile, On is raising its sales guidance as it gears up for the holiday shopping season. Retail analysts expect most of the industry to lean heavily on discounts and promotions to drum up demand during the critical holiday shopping season, but On won't even be offering a Black Friday discount, said co-founder and Executive co-Chairman Caspar Coppetti.On will be "full price through the holiday season," Coppetti said in an interview with CNBC. "This is against the backdrop of a very competitive and very discount-driven environment currently, and so this leveling up that we've done, and then just being able to command a much higher selling price, really sets On apart." While On is typically sold alongside brands like Nike, Hoka and Brooks Running, its holiday strategy is similar to those of luxury names. It's part of the company's strategy to be the most premium sportswear brand on the market by not just offering the highest prices but also the most innovative products across footwear and apparel. Still far smaller than many of the legacy brands it competes with, On has slowly been chipping away at their market share primarily through innovation, where industry leader Nike has been criticized for falling behind.Last year, On launched its Cloudboom Strike LS produced with its "LightSpray" technology, which makes performance running shoes using a spray gun in a matter of minutes. Runner Hellen Obiri was wearing the shoes when she broke the women's record in the New York City Marathon by almost three minutes earlier this month."That's a very strong validation," said Coppetti. "Runners really do pay attention to what people are wearing now when they're in a race, because these innovations trickle down and they inform their choices."Editor's note: This story was updated to reflect that LSEG revised its comparable earnings per share figure to include estimates from both classes of stock. LSEG previously hadn't disclosed that analysts use the combined earnings from both classes.

The development gains significance as the project is expected to ease the supply of LNG to India and enhance energy security. View More

Maharashtra Deputy CM Ajit Pawar stated he'll "use his conscience" regarding activist Anjali Damania's resignation demand over a Rs 300-crore Pune land deal involving his son's firm. The government has scrapped the deal and ordered an inquiry. Pawar denies wrongdoing, calling allegations "random accusations" and assuring transparency, while Damania insists a fair probe is impossible with him in office. View More

Anthropic rival OpenAI has secured more than $1.4 trillion worth of deals with Nvidia, Broadcom, Oracle and the major cloud providers. View More

Anthropic announced plans Wednesday to spend $50 billion on a U.S. artificial intelligence infrastructure build-out, starting with custom data centers in Texas and New York.The facilities, which will be designed to support the company's rapid enterprise growth and its long-term research agenda, will be developed in partnership with Fluidstack.Fluidstack is an AI cloud platform that supplies large-scale graphics processing unit, or GPU, clusters to clients like Meta, Midjourney and Mistral.Additional sites are expected to follow, with the first locations going live in 2026. The project is expected to create 800 permanent jobs and more than 2,000 construction roles.The investment positions Anthropic as a major domestic player in physical AI infrastructure at a moment when policymakers are increasingly focused on U.S.-based compute capacity and technological sovereignty."We're getting closer to AI that can accelerate scientific discovery and help solve complex problems in ways that weren't possible before. Realizing that potential requires infrastructure that can support continued development at the frontier," said CEO Dario Amodei. "These sites will help us build more capable AI systems that can drive those breakthroughs, while creating American jobs."The move comes as Anthropic rival OpenAI pushes forward with an aggressive build-out of its own. The ChatGPT maker has secured more than $1.4 trillion in long-term infrastructure commitments through deals with Nvidia, Broadcom, Oracle and the major cloud providers, including Microsoft, Google, and, most recently, Amazon.The scale of that spending has raised questions about whether the U.S. has the power capacity and industrial backbone to deliver on such promises, and whether the AI sector is drifting into bubble territory. Read more CNBC tech newsAI spending is not all equal. Wall Street rewards hyperscalers, punishes DoorDash and DuolingoOura expects close to $2 billion in 2026 sales, almost doubling for the second consecutive yearTesla investor support for Elon Musk's massive pay plan was lower in 2025 than in 2018Former Google, Meta executives raise $100 million for high-capacity AI servers startup Anthropic serves more than 300,000 businesses, with enterprise clients driving most of its revenue.The number of large accounts, which generate more than $100,000 annually, has nearly increased sevenfold in the past year. Internal projections obtained by The Wall Street Journal showed Anthropic expects to break even by 2028, well ahead of OpenAI, which is projecting $74 billion in operating losses that same year.To support that trajectory, Anthropic tapped Fluidstack to build custom facilities optimized for its AI workloads, citing the firm's speed and ability to deliver gigawatts of power on short timelines.In parallel, Amazon has opened a dedicated data center campus for Anthropic on 1,200 acres in Indiana.The $11 billion facility is already up and running, while many competitors are still promising data centers of the future. Anthropic has also expanded its compute deal with Google by tens of billions of dollars.The move also comes as the role of the federal government in financing AI infrastructure becomes a flashpoint.Last week, OpenAI asked the Trump administration to expand a key CHIPS Act tax credit to include AI data centers and grid components like transformers, according to a letter obtained by Bloomberg.That request followed backlash over comments from CFO Sarah Friar, who had floated the idea of a government "backstop" for OpenAI's compute deals.Though the company has since walked back the suggestion of federal guarantees, the episode underscored the political and financial uncertainty surrounding how — and by whom — America's AI infrastructure will be funded.WATCH: SoftBank's Nvidia exit fuels OpenAI push despite mounting losses, stiff competition from Anthropic watch nowVIDEO4:1704:17SoftBank’s Nvidia exit fuels OpenAI push despite mounting losses, stiff competition from AnthropicThe Exchange

The two gang members identified as Sharanjit Singh and Aman Kumar were nabbed following an exchange of fire at Ghaghar Bridge on the Ambala–Dera Bassi highway, Punjab Police said. View More

The Autumn Budget on Nov. 26 could prove pivotal, or politically fatal, for the PM. View More

Britain's Prime Minister Keir Starmer attends a Service of Remembrance to commemorate the 80th Anniversary of VJ Day at The National Memorial Arboretum on August 15, 2025 in Alrewas, Staffordshire. Anthony Devlin | Getty Images Entertainment | Getty Images U.K. Prime Minister Keir Starmer is looking increasingly vulnerable this week amid mounting speculation that he could face a leadership challenge after the Autumn Budget later in November.Economists expect Starmer's right-hand in the Treasury, Chancellor Rachel Reeves, will be forced to break Labour Party manifesto pledges not to raise taxes on workers when she unveils her fiscal plans in the budget on Nov. 26.Reeves finds herself in an unenviable position as she tries to fill a fiscal black hole caused by Labour spending pledges, U-turns on reform spending cuts and her own rules on limiting borrowing.Raising taxes on working people is likely to upset not only voters, who have expressed disappointment with Starmer's leadership since Labour's landslide election win in July 2024, but also prominent members of the PM's top team in the Cabinet.The BBC reported Wednesday that there are a number of high-profile names — and Starmer allies — are being circulated as potential replacements for the PM if a leadership challenge is mounted, including Health Secretary Wes Streeting and Home Secretary Shabana Mahmood.Other names reported by the BBC include Ed Miliband, energy minister, and backbenchers including the former transport secretary Louise Haigh. Mutiny afoot? The man seen as the main contender when it comes to a potential challenge to Starmer's leadership, Wes Streeting, denied a plot was afoot, telling Sky News Wednesday that he is not planning to try to oust the PM. He instead accused allies of the PM of briefing against him in what he said was "self-defeating and self-destructive behaviour." Britain's Health Secretary Wes Streeting speaks during an event to launch “NHS Day of Action” on March 28, 2025 in Runcorn, England.Cameron Smith | Getty Images News | Getty Images When asked if he will launch a leadership challenge after the budget, Streeting told Sky's 'Mornings with Ridge and Frost' program: "No," saying overnight briefings on the matter were "totally self-defeating ... not least because it's not true."Streeting said while he hadn't backed Starmer's initial bid to lead the Labour Party, he had supported the PM "from the moment he was elected."In any case, the narrative around a potential leadership challenge is damaging for a prime minister who is seen as having performed well on a global stage — ingratiating himself with U.S. President Trump and fellow EU leaders, and achieving trade deals with the U.S., India and EU in the last year — but performing badly with voters at home.Public dissatisfaction over illegal immigration, the economy and the criminal justice system, following several recent accidental prisoner releases, has grown in recent months with support for rightwing Reform party growing, making it a major threat when local elections are held in May. The next general election is not due to be held until 2029.A YouGov poll in October showed that just 21% of Britons holding a favorable opinion of the prime minister with 72% seeing him unfavourably. That left Starmer with a net a favourability rating of -51, which is the lowest recorded by YouGov so far, the pollster said. Leftist shift? Analysts say the risks to Starmer's leadership are "likely to be noise for now" and that the PM will stay in office, for now. Nonetheless, Starmer's critics are growing in confidence and likely smell blood, with the budget and next year's local elections in May, the next big litmus test of public opinion, potentially decisive crunch points."Starmer faces the worst opinion polling in history of any modern Prime Minister and there is no smoke without fire," Jordan Rochester, head of FICC Strategy EMEA at Mizuho Bank, said in emailed comments Wednesday."If the budget passes without major upset, the idea of leadership replacement will be kicked into May's local elections where polls suggest a big loss for Labour ahead. A moment that can lead to leadership changes," he added.There are two scenarios for what this means for markets, Rochester said, noting: "We lean to a continued "centrist" being the ultimate victor, but if and when this happens the market will need to price in the risk of a hard left shift." Markets watching Markets were keeping a close eye on reports Wednesday with yields on British government bonds — known as gilts — edging higher across the maturity curve on Tuesday.By 10:10 a.m. in London, the yield on the benchmark 10-year gilt added 3 basis points to trade at 4.419%. Bond yields and prices move in opposite directions, so when investors are reluctant to lend to a government, the price of the bond falls and the yield rises.The U.K. government currently has the highest borrowing costs of any G-7 nation, with its 30-year gilt yield trading well above the critical 5% threshold. UK Prime Minister Keir Starmer and his wife Victoria Starmer serve tea and cake in Downing Street on May 5, 2025 in London, England.Peter Nicholls | Getty Images News | Getty Images Meanwhile, the British pound fell 0.27% against the U.S. dollar to trade at $1.311, and shed 0.1% versus the euro."Markets are watching Westminster closely," Nigel Green of deVere Group, commented Wednesday."Government leadership rumours surfacing before a crucial Budget reinforce the sense that the government is under strain. Investors aren't yet pricing in political instability, but they're alert to the risk that this story could return in the new year," he added."We believe there's unlikely to be an immediate leadership challenge after the Budget — the priority will be getting through it cleanly, but this will be extremely tough after it looks like income tax rises are now almost inevitable."— CNBC's Chloe Taylor contributed reporting to this story.