UK Gilt Yields Near 2007 Highs

2026-10-14 13:37 By Joana Ferreira 1 min. read

The UK 10-year gilt yield rose to 5.46%, nearing its highest level since July 2007, tracking higher US Treasury yields after stronger-than-expected US inflation boosted expectations of a Federal Reserve rate hike this month.

Meanwhile, BoE Chief Economist Huw Pill expressed skepticism about market expectations for four rate increases over the coming year, arguing that stronger evidence was needed to justify a larger hike despite the need to address the energy shock triggered by the Iran war.

Governor Andrew Bailey, however, warned that a rate increase would become increasingly difficult to avoid if the energy shock persists.

Markets see a near-100% chance of a BoE rate hike in November, its first in over three years, though expectations for four increases by June 2027 have eased slightly.

Separately, the IMF urged the UK government to clarify how it will fund higher defense spending, with an additional £11 billion annually needed to raise military expenditure to 3% of GDP by 2030.



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