UK Gilt Yields Stay Near Multi-Decade Highs

2026-10-09 09:20 By Joana Ferreira 1 min. read

UK 10-year gilt yields remained above 5.4%, close to a recent 19-year high, as investors weighed easing oil prices against hawkish remarks from Bank of England policymakers.

Brent crude retreated as Middle East supply concerns eased after US President Donald Trump ruled out an attack on Iran before the November midterm elections, citing productive talks to end the conflict.

Meanwhile, BoE Chief Economist Huw Pill said central banks must remain focused on controlling inflation, while MPC member Megan Greene warned that UK wage growth could reach around 3.5% in 2027, potentially sustaining inflationary pressures and increasing the need for further rate hikes.

Governor Andrew Bailey also stressed that central banks must remain focused on bringing inflation down.

Markets are pricing in a BoE rate hike in November, as the Bank remains the only major central bank yet to begin tightening monetary policy in response to inflationary pressures stemming from the US-Iran war.



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UK Gilt Yields Stay Near Multi-Decade Highs
UK 10-year gilt yields remained above 5.4%, close to a recent 19-year high, as investors weighed easing oil prices against hawkish remarks from Bank of England policymakers. Brent crude retreated as Middle East supply concerns eased after US President Donald Trump ruled out an attack on Iran before the November midterm elections, citing productive talks to end the conflict. Meanwhile, BoE Chief Economist Huw Pill said central banks must remain focused on controlling inflation, while MPC member Megan Greene warned that UK wage growth could reach around 3.5% in 2027, potentially sustaining inflationary pressures and increasing the need for further rate hikes. Governor Andrew Bailey also stressed that central banks must remain focused on bringing inflation down. Markets are pricing in a BoE rate hike in November, as the Bank remains the only major central bank yet to begin tightening monetary policy in response to inflationary pressures stemming from the US-Iran war.
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UK 10Y Bond Yield Hits 19-year High
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UK Gilt Yields Rise as Oil Fuels Rate-Hike Bets
UK 10-year gilt yields climbed toward 5.5%, returning to levels not seen since July 2007, as oil prices rebounded and inflation concerns intensified, reinforcing expectations of further interest-rate hikes from major central banks. Brent crude rose above $100 a barrel amid persistent risks to Middle East energy flows, following reports that Iran had intensified attacks on tankers in the Strait of Hormuz in recent days. UK swaps now price in over 100 basis points of Bank of England rate increases by the end of next year. Expectations for the ECB and Federal Reserve have also edged higher, with traders pricing roughly 75 basis points and 85 basis points of hikes over the same period, respectively. Meanwhile, the UK’s party conference season wraps up today, with the budget now just three weeks away. Chancellor John Healey has set Oct. 28 for the fiscal statement, a month earlier than last year, in an effort to limit the time available for policy speculation.
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