UK Gilt Yields Hold Near 2008 Highs on Rate Hike Bets

2026-04-24 12:52 By Joana Ferreira 1 min. read

UK 10-year gilt yields pulled back slightly but stayed above 4.95%, approaching levels last seen in 2008, as traders ramped up bets on Bank of England rate hikes.

Escalating crude prices and mounting inflation fears are driving the shift, with businesses now expecting CPI inflation to hit 4% over the next year, up from 3.5% in March, according to the Bank of England’s Decision Maker Panel.

Firms also plan to raise prices by 3.8%, though wage growth is forecast to slow.

Optimism briefly lifted markets after reports that Iranian Foreign Minister Abbas Araghchi would arrive in Islamabad on Friday, reigniting hopes for progress in US-Iran negotiations.

However, Brent crude is still on track to end the week 14% higher, reflecting limited progress in peace talks.

On the domestic front, UK retail sales unexpectedly rose by 0.7% last month, reinforcing expectations for BOE rate hikes, with markets now fully pricing in two quarter-point increases in 2026 and considering a third by year-end.



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UK Gilt Yields Hold Near 2008 Highs on Rate Hike Bets
UK 10-year gilt yields pulled back slightly but stayed above 4.95%, approaching levels last seen in 2008, as traders ramped up bets on Bank of England rate hikes. Escalating crude prices and mounting inflation fears are driving the shift, with businesses now expecting CPI inflation to hit 4% over the next year, up from 3.5% in March, according to the Bank of England’s Decision Maker Panel. Firms also plan to raise prices by 3.8%, though wage growth is forecast to slow. Optimism briefly lifted markets after reports that Iranian Foreign Minister Abbas Araghchi would arrive in Islamabad on Friday, reigniting hopes for progress in US-Iran negotiations. However, Brent crude is still on track to end the week 14% higher, reflecting limited progress in peace talks. On the domestic front, UK retail sales unexpectedly rose by 0.7% last month, reinforcing expectations for BOE rate hikes, with markets now fully pricing in two quarter-point increases in 2026 and considering a third by year-end.
2026-04-24
UK 10-Year Gilt Yields Surge to 2008 Highs
UK 10-year gilt yields approached the 5% mark, nearing levels not seen since 2008, as traders increased their bets on Bank of England rate hikes amid escalating crude prices, fueled by stalled US-Iran negotiations, and mounting inflation concerns. Businesses surveyed by the Bank of England now expect CPI inflation to reach 4% in the year ahead, up from 3.5% in March, according to the central bank’s Decision Maker Panel. Firms also anticipate raising prices by 3.8%, though wage growth is projected to slow. Market optimism about a diplomatic resolution to the conflict has waned following the collapse of a two-week ceasefire and the failure to resume talks. Meanwhile, UK retail sales unexpectedly grew by 0.7% last month, driven by petrol stockpiling amid soaring prices. The data has reinforced expectations of near-term interest rate hikes, with investors now fully pricing in two quarter-point increases in 2026 and assigning a 50% chance of a third hike by year-end.
2026-04-24
UK Gilt Yields Hit 18-Year High on Mounting Inflation Fears
UK 10-year gilt yields rose above 4.95%, their highest level since 2008, as escalating US-Iran tensions and surging oil prices intensified concerns over inflation. Diplomatic efforts remain stalled, with no new peace talks scheduled and both sides locked in a dispute over the Strait of Hormuz. Domestically, Morgan McSweeney, former chief of staff to Prime Minister Keir Starmer, will testify next week regarding allegations over the vetting of Peter Mandelson. Labour MP Jonathan Brash intensified pressure on Starmer, arguing that the Mandelson scandal has crippled governance and made the PM’s resignation unavoidable. On the data front, the UK’s March budget deficit reached £12.6 billion, the lowest for March since 2022 but still exceeding the forecasted £10.4 billion. April’s PMI showed UK business activity rebounding after March’s war-induced slowdown, but the uptick partly reflects firms stockpiling supplies amid fears of price spikes and shortages.
2026-04-23