FX.co ★ UK Gilt Yields Near Six-Month High on Renewed Inflation Concerns

The yield on the UK’s 10-year gilt advanced toward 4.7%, nearing last week’s six-month high of 4.78%, as surging energy prices deepened inflation concerns. Oil extended its rally on Wednesday after Iran’s Revolutionary Guard issued evacuation warnings for oil facilities in Saudi Arabia, the UAE, and Qatar, following Israeli strikes on Iran’s Asaluyeh refinery and the South Pars gas field. The sharp escalation in energy costs has prompted traders to assign nearly a 50% probability to a Bank of England rate hike by November—a stark reversal from early March, when markets were pricing in two rate cuts this year. At Thursday’s meeting, analysts will closely examine the Monetary Policy Committee’s vote split, with a 7–2 or 6–3 decision to keep rates on hold seen as the most likely outcome.