FX.co ★ UK Gilt Yields Set For Biggest Weekly Jump in Two Months

UK 10-year gilt yields rose to 5.1%, their highest level since July 2008, and are heading for a weekly gain of nearly 20 basis points—the largest increase since the second week after the outbreak of the Middle East conflict. The move reflects mounting political uncertainty after Andy Burnham emerged as a potential challenger to Prime Minister Keir Starmer. Burnham, widely seen as the least bond‑market‑friendly option, secured a route to contest the leadership after MP Josh Simons withdrew from the race. Other potential contenders include Wes Streeting, Ed Miliband, and Angela Rayner, with Rayner viewed as carrying a similarly elevated risk profile to Burnham from an investor perspective.

In parallel, a comment by US President Donald Trump that “we don’t need the Strait of Hormuz open” helped push crude oil prices higher. Money markets now imply roughly 70 basis points of Bank of England rate hikes over the remainder of the year. Huw Pill, the BOE’s chief economist—who backed a rate increase at the most recent policy meeting—has argued that further tightening is needed to offset inflationary pressures stemming from the war‑driven energy shock.