The 10-year bond yield climbed to 5.17% on Friday, marking the highest interest rate for the Treasury since 2008.
Simultaneously, the British pound dropped to $1.336 after Andy Burnham announced his bid for a seat in Parliament.
Investors fear a potential shift in leadership could lead to increased public deficits and higher long-term government debt.
Market analysts suggest Burnham represents a less market-friendly option compared to other potential candidates for the top job.
Long-term 30-year gilt yields also surged to 5.84%, hitting their highest level in nearly three decades this afternoon.
Energy prices added further pressure as Brent crude climbed above $109 a barrel, fueling concerns regarding domestic inflation.
The FTSE 100 index slid 1.7% as traders reacted to the prospect of a protracted and noisy leadership transition.
Foreign buyers now appear to be ditching UK gilts, leaving the government to navigate a volatile and fragile economy.
