UK Gilt Yield Set for Biggest Weekly Jump Since 2022

2026-03-06 09:46 By Joana Ferreira 1 min. read

The UK 10-year gilt yield surged above 4.6%, reaching its highest since mid-October, and is poised for an over 40-basis-point weekly rise, the largest since September 2022, as investors assessed rising inflation risks tied to the escalating Middle East conflict.

Heightened regional tensions have raised concerns over potential disruptions to global crude oil supplies, pushing energy prices higher and likely keeping inflation elevated across Europe.

This has reduced the likelihood of a Bank of England rate cut, with UK money markets now pricing less than a 20% chance of a cut this month and UK rate futures showing less than a 50–50 chance of a single cut by the end of 2026.

Earlier this week, the Office for Budget Responsibility revised the UK’s 2026 growth forecast down to 1.1% from 1.4%, even before accounting for potential energy shocks.

Growth projections for 2027 and 2028 were raised to 1.6%, reflecting expectations for lower borrowing and more moderate inflation.



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