UK 10Y Bond Yield Hits 7-week Low

UK 10-year gilt yields tumbled below 4.8%, hitting their lowest since mid-April, after US President Donald Trump suggested a US-Iran deal could come as soon as this weekend, though Tehran has yet to confirm. Yields have been volatile, moving in line with oil prices and war-related developments, as traders weigh the risks of a prolonged Strait of Hormuz closure. The longer the disruption lasts, the higher the chance that elevated energy prices will fuel broader inflation, potentially compelling central banks to implement significant rate hikes. Meanwhile, UK GDP shrunk 0.1% in April, the first monthly drop since August, casting doubt on further Bank of England tightening. Investors are also focused on the June 18 Makerfield by-election, where Labour’s Andy Burnham, a potential successor to embattled Prime Minister Keir Starmer, could signal a shift toward looser fiscal policy.

UK 10 Year Government Bond Yield decreased to 4.79%, the lowest since April 2026. Over the past 4 weeks, United Kingdom 10Y Bond Yield lost 25.50 basis points, and in the last 12 months, it increased 24.21 basis points.

UK 10-year gilt yields remained little changed at 4.94%, close to their highest level since May 21, as inflation concerns deepened amid escalating Middle East tensions. The US and Iran exchanged air strikes, with US President Donald Trump threatening further action unless Tehran agrees to a peace deal immediately. Money markets currently price in at least a 25-basis-point rate hike by the Bank of England in September, with a high probability of a second increase by the end of the year. Investors are now focused on Friday’s monthly GDP data, alongside manufacturing output and foreign trade balance figures. Forecasts indicate the UK economy likely contracted by 0.1% in April due to the delayed impact of the Iran conflict on businesses and consumers, with political uncertainty surrounding the Labour Party’s leadership adding to the downturn.