UK Gilt Yields Hit 2008 Highs

2026-04-29 08:27 By Joana Ferreira 1 min. read

UK 10-year gilt yields climbed above 5%, approaching levels last seen in 2008, as investors weighed revised UK economic forecasts and awaited policy decisions from the Fed and the Bank of England, alongside updates on US-Iran talks.

Lloyds raised its 2026 UK inflation forecast to 3.4% from 2.6% and cut its GDP growth outlook to 0.5% from 1.2%.

The bank now expects no Bank of England rate cuts this year, down from its previous forecast of two, and projects unemployment to peak at 5.6% in Q4, up from 5.3%.

On monetary policy, both the Fed and the BoE are expected to hold rates steady this week, reflecting caution due to the Middle East crisis.

Yet, markets still price in two quarter-point BoE rate hikes for 2026.

Adding to the pressure, Brent crude jumped to a four-year high amid the US-Iran standoff, with reports that US President Trump ordered preparations for a prolonged naval blockade in the Strait of Hormuz to increase economic pressure on Iran.



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