UK Gilt Yields Edge Higher as Rate-Hike Bets Rise

2026-09-08 07:51 By Joana Ferreira 1 min. read

The UK 10-year gilt yield edged up to 5.2%, as investors increasingly priced in the prospect of further Bank of England rate hikes in the coming months amid renewed inflation concerns.

Brent crude approached $100 a barrel, while UK natural gas prices climbed to their highest level since late 2022 amid renewed tensions in the Middle East and reports that Iran and Oman were nearing an agreement to manage shipping through the Strait of Hormuz.

Persistent inflation pressures and resilient economic growth are keeping central banks under pressure to maintain a restrictive policy stance.

Markets are fully pricing in a 25-basis-point BoE rate increase by December and a second hike by March 2027, according to LSEG data.

Investors also continued to assess the government’s commitment to fiscal discipline and restoring the UK’s credibility in international bond markets ahead of the Oct. 28 budget, alongside plans to boost regional growth by using public institutions to attract private investment.



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UK Gilt Yields Edge Higher as Rate-Hike Bets Rise
The UK 10-year gilt yield edged up to 5.2%, as investors increasingly priced in the prospect of further Bank of England rate hikes in the coming months amid renewed inflation concerns. Brent crude approached $100 a barrel, while UK natural gas prices climbed to their highest level since late 2022 amid renewed tensions in the Middle East and reports that Iran and Oman were nearing an agreement to manage shipping through the Strait of Hormuz. Persistent inflation pressures and resilient economic growth are keeping central banks under pressure to maintain a restrictive policy stance. Markets are fully pricing in a 25-basis-point BoE rate increase by December and a second hike by March 2027, according to LSEG data. Investors also continued to assess the government’s commitment to fiscal discipline and restoring the UK’s credibility in international bond markets ahead of the Oct. 28 budget, alongside plans to boost regional growth by using public institutions to attract private investment.
2026-09-08
UK Gilt Yields Steady as Healey Pledges Fiscal Discipline
The UK 10-year gilt yield was little changed at 5.15% as investors digested Chancellor John Healey’s first major speech ahead of the Oct. 28 budget. Healey pledged to maintain fiscal discipline and restore the UK’s credibility in international bond markets, while also outlining plans to boost regional growth by using institutions including the National Wealth Fund and British Business Bank to attract private investment. Higher borrowing costs, fueled by renewed inflation concerns amid the US-Iran war and uncertainty over Prime Minister Andy Burnham’s spending plans, are eroding the government’s fiscal headroom and raising expectations for tax increases in the budget. Meanwhile, oil prices approached seven-week highs after US strikes on Iranian oil tankers, while UK firms increased full-time hiring in August for the first time in four years. UK house prices, however, fell year-on-year for the first time since November 2023, Lloyds data showed.
2026-09-07
UK Yields Rise as Investors Await Healey Speech
The UK 10-year gilt yield edged higher to 5.16% on Monday as investors awaited UK Chancellor John Healey’s first major speech ahead of next month’s budget announcement. Meanwhile, oil prices moved closer to seven-week highs after the US struck three Iranian oil tankers over the weekend, destroying one, while Tehran threatened to establish a new restricted zone outside the Strait of Hormuz. Higher oil prices have been a key driver of the global bond selloff, leaving UK gilts particularly vulnerable. On the data front, UK firms increased full-time hiring in August for the first time in four years, according to a closely watched REC survey. The figures will be of particular interest to Bank of England policymakers as they assess the strength of the labor market. Meanwhile, UK house prices fell year-on-year for the first time since November 2023, according to Lloyds data.
2026-09-07