UK 10-Year Gilt Yield Near Two-Month High on Rate Hike Bets

2026-07-15 11:58 By Joana Ferreira 1 min. read

The UK 10-year gilt yield edged up to 5%, hovering just below the nearly two-month high reached on Tuesday, as rising oil prices fueled inflation concerns and reinforced expectations of further monetary tightening by the Bank of England.

Brent crude climbed to a one-month high amid escalating tensions in the Middle East, with the US blockade of Iranian shipping through the Strait of Hormuz and continued strikes against Iran raising concerns over the stability of global energy supplies.

Money markets are now fully pricing in a Bank of England interest rate hike by November, with a second increase expected by March 2027.

Investors are also closely monitoring developments in UK politics ahead of Andy Burnham's expected appointment as prime minister on July 20.

Attention has turned to his choice of finance minister, with betting markets now favoring Foreign Secretary Yvette Cooper over Ed Miliband, who is widely viewed as supporting a more expansionary fiscal stance.



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UK 10-Year Gilt Yield Near Two-Month High on Rate Hike Bets
The UK 10-year gilt yield edged up to 5%, hovering just below the nearly two-month high reached on Tuesday, as rising oil prices fueled inflation concerns and reinforced expectations of further monetary tightening by the Bank of England. Brent crude climbed to a one-month high amid escalating tensions in the Middle East, with the US blockade of Iranian shipping through the Strait of Hormuz and continued strikes against Iran raising concerns over the stability of global energy supplies. Money markets are now fully pricing in a Bank of England interest rate hike by November, with a second increase expected by March 2027. Investors are also closely monitoring developments in UK politics ahead of Andy Burnham's expected appointment as prime minister on July 20. Attention has turned to his choice of finance minister, with betting markets now favoring Foreign Secretary Yvette Cooper over Ed Miliband, who is widely viewed as supporting a more expansionary fiscal stance.
2026-07-15
UK Gilt Yields Ease but Remain Close to Two-Month Highs
UK 10-year gilt yields fell back below 5%, though they remained near two-month highs, tracking a decline in US Treasury yields after softer-than-expected US inflation data reduced expectations for Federal Reserve rate hikes this year. However, Middle East tensions raised concerns that rising energy prices could reignite inflation and push interest rates higher, leading markets to increase bets on Bank of England rate hikes. Investors now nearly fully expect two increases in 2026, with a September hike fully priced in. Attention also shifted to UK politics, as Andy Burnham prepares to replace Keir Starmer as prime minister on July 20. The focus is on his choice for finance minister, with Ed Miliband, seen as fiscally expansive, emerging as the favorite. This prospect has unsettled gilt investors, who are already wary of Britain’s fiscal fragility.
2026-07-14
UK Gilt Yields Surge on Rate Hike Bets
UK 10-year gilt yields climbed above 5%, reaching their highest level since May 21, as the Middle East conflict stoked fears that rising energy prices could drive inflation and interest rates higher. Two-year gilt yields also rose above 4.4%, their highest in nearly two months, after gaining nearly 13 basis points on Monday. The US military continued strikes against Iran after President Donald Trump reinstated a blockade on Iranian shipping and proposed a 20% fee to guard the Strait of Hormuz, heightening uncertainty over energy flows. Markets responded by pricing in further Bank of England rate hikes, nearly fully expecting two increases in 2026, with a September hike now fully priced in. In the US, Fed Governor Christopher Waller warned that the central bank may need to raise rates "in the near term" if inflation remains above the 2% target. Investors now await remarks from Federal Reserve Chair Kevin Warsh and US inflation data later today.
2026-07-14