FX.co ★ UK Gilt Yields Slightly Up as Burnham’s Economic Stance Awaited

UK 10-year gilt yields climbed toward 4.75%, rebounding from two-month lows, as investors awaited Andy Burnham’s speech for clues on his economic agenda. Burnham, the only declared candidate to succeed Keir Starmer, is expected to call for expansionary fiscal policies following his return to Westminster. Markets are also weighing the implications of an interim US-Iran peace agreement and evolving interest rate expectations in both the UK and the US. The reopening of the Strait of Hormuz has pushed oil prices and inflation expectations lower, leading investors to scale back wagers on additional Bank of England rate hikes. At the same time, Fed Chair Kevin Warsh’s hawkish stance has reinforced expectations of US rate increases later this year.