UK Gilt Yields Set For Biggest Weekly Jump in Two Months

2026-05-15 07:31 By Joana Ferreira 1 min. read

UK 10-year gilt yields climbed toward 5.2%, their highest since July 2008, and are on track for a nearly 25-basis-point weekly rise, the largest since the second week after the Middle East conflict began.

The surge follows growing political uncertainty after Andy Burnham emerged as a potential challenger to Prime Minister Keir Starmer.

Burnham, viewed as the least favorable option for bond investors, secured a path to challenge Starmer after MP Josh Simons stepped aside.

Other contenders include Wes Streeting, Ed Miliband, and Angela Rayner, with Rayner sharing a similar risk profile to Burnham.

Meanwhile, US President Donald Trump’s remark that “we don’t need the Strait of Hormuz open” pushed crude prices higher.

Traders now expect the Bank of England to deliver about 70 basis points of hikes this year.

Huw Pill, the BOE’s chief economist, who voted for a rate increase at the last meeting, argued for further hikes to counter inflationary pressures from the war-related energy shock.



News Stream
UK Gilt Yields Rise on Inflation Fears
UK 10-year gilt yields rose toward 4.95%, their highest since May 21, as inflation concerns intensified amid escalating Middle East tensions. The US and Iran exchanged fresh strikes, with President Donald Trump warning that Iran is taking "too long" to negotiate a peace agreement and will now "pay the price." Iranian Parliament Speaker Mohammad Bagher Ghalibaf also stated on Wednesday that Tehran would respond "decisively and without delay" to any aggression. Rising energy costs from the conflict have heightened inflation fears, prompting investors to price in at least a 25-basis-point rate hike by the Bank of England in September, with a strong chance of a second increase. However, dovish Monetary Policy Committee member Alan Taylor, who backed the 8-1 vote to hold rates in April, said on Monday that current interest rates are "quite restrictive" and saw no need for further tightening to control inflation.
2026-06-10
UK Gilt Yields Steady as Middle East Tensions Ease
UK 10-year gilt yields held steady at 4.93%, slightly below two-week highs, after Iran and Israel agreed to de-escalate strikes following an appeal from US President Donald Trump. The conflict had previously driven crude prices higher on Monday, as fears grew that the ceasefire could collapse. Rising energy costs from the tensions have fueled inflation concerns, leading investors to price in at least a 25-basis-point rate hike by the Bank of England in September, with a strong likelihood of a second increase. Meanwhile, dovish Monetary Policy Committee member Alan Taylor, who supported the 8-1 vote to hold rates in April, stated on Monday that current interest rates are "quite restrictive" and saw no need for further tightening to curb inflation.
2026-06-09
UK Gilt Yields Near May Peak on Inflation Fears
UK 10-year gilt yields climbed back to 4.94%, close to their highest level since May 21, as renewed Middle East hostilities stoked fears of a prolonged Iran conflict and pushed oil prices higher, adding to inflation concerns. Brent crude surged over 4% after Iran and Israel exchanged missile strikes, despite calls from President Trump for both sides to cease hostilities and pursue peace talks. Market expectations shifted, with traders now fully pricing in two Bank of England rate hikes this year. However, dovish Monetary Policy Committee member Alan Taylor, who backed the 8-1 decision to hold rates in April, stated that current interest rates are "quite restrictive" and saw no need for further increases to address inflationary pressures. On the economic data front, permanent staff placements fell at the sharpest rate in 10 months in May, with firms citing low confidence and rising costs, according to REC/KPMG data.
2026-06-08