FX.co ★ UK Yields Steady as Markets Eye Burnham's Cabinet

The UK 10-year gilt yield was little changed at 4.95%, holding near a two-month high and heading for a third straight weekly advance — its longest winning streak since early March, when markets reacted to the outbreak of the Iran war. Investors are now digesting the confirmation of Andy Burnham as the new Labour leader, clearing the way for him to become prime minister on July 20. Focus has turned to his choice of Chancellor, with reports that Shabana Mahmood is the leading candidate helping to reassure investors and temper worries about a more expansionary fiscal stance. At the same time, rising tensions in the Middle East have pushed oil prices to one-month highs, adding to inflationary pressures and bolstering expectations that the Bank of England will continue tightening monetary policy. Markets currently fully price in a rate hike by year-end, with an additional increase anticipated by March 2027.