UK Gilt Yields Rebound as US-Iran Tensions Lift Oil Prices

2026-06-01 09:31 By Joana Ferreira 1 min. read

UK 10-year gilt yields rose to 4.85% at the start of June, rebounding from over one-month lows at the end of May, as oil prices surged amid escalating US-Iran tensions.

Both nations continued exchanging strikes, with Iran claiming it targeted a US airbase previously used in an attack on a telecommunications tower on Sirik Island, while both sides cited "self-defense." Over the weekend, they exchanged proposals to revise a draft deal aimed at extending the ceasefire and reopening the Strait of Hormuz, though progress remained uncertain.

The geopolitical uncertainty has led investors to modestly increase expectations for further Bank of England rate hikes this year.

Economically, UK house prices fell 0.6% in May, according to Nationwide, a sharper decline than the expected 0.1% and the largest monthly drop since June 2025, driven by weakening consumer confidence and the Iran conflict’s impact on energy prices.



News Stream
UK Gilt Yields Rebound as US-Iran Tensions Lift Oil Prices
UK 10-year gilt yields rose to 4.85% at the start of June, rebounding from over one-month lows at the end of May, as oil prices surged amid escalating US-Iran tensions. Both nations continued exchanging strikes, with Iran claiming it targeted a US airbase previously used in an attack on a telecommunications tower on Sirik Island, while both sides cited "self-defense." Over the weekend, they exchanged proposals to revise a draft deal aimed at extending the ceasefire and reopening the Strait of Hormuz, though progress remained uncertain. The geopolitical uncertainty has led investors to modestly increase expectations for further Bank of England rate hikes this year. Economically, UK house prices fell 0.6% in May, according to Nationwide, a sharper decline than the expected 0.1% and the largest monthly drop since June 2025, driven by weakening consumer confidence and the Iran conflict’s impact on energy prices.
2026-06-01
UK Gilt Yields Near April Lows as Inflation Fears Ease
UK 10-year gilt yields hovered at 4.8% at the end of May, near their lowest since April 17 and on track for a 19-basis-point monthly decline, as cautious optimism over a potential US-Iran agreement helped ease inflation concerns. Negotiations to end the three-month war continued, with reports that Washington and Tehran had agreed on a 60-day ceasefire extension to allow formal talks, though President Trump has yet to approve the memorandum of understanding. The bond market also drew support from UK Prime Minister Keir Starmer’s Labour Party suffering local election losses that were not as severe as initially feared. Domestic data further bolstered sentiment, with a cooling labor market, softer-than-expected inflation, and signs of slowing economic activity leading traders to scale back expectations for a Bank of England rate hike.
2026-05-29
UK Gilt Yields Fall as Inflation Pressures Ease on US–Iran Deal Hopes
UK 10-year gilt yields reversed early gains to slip back toward 4.8%, their lowest level since April 17, as renewed optimism over a potential US–Iran agreement helped ease inflation concerns and supported fixed-income markets. The rally in UK government bonds extended to a seventh consecutive session, marking the longest winning streak since just before tensions escalated in the Iran conflict in late February. Sentiment has also been underpinned by recent domestic data showing a cooling labor market, softer-than-expected inflation, and signs of slowing economic activity, prompting traders to scale back expectations for a Bank of England rate hike. According to Axios, US and Iranian negotiators have reached a memorandum of understanding aimed at extending a ceasefire by 60 days and initiating talks on Iran’s nuclear program, though final approval from US President Donald Trump is still pending.
2026-05-28