FX.co ★ UK Gilt Yields Hit Two-Month High as Oil Surges

The UK 10-year gilt yield rose to 5%, its highest level since May 19, as surging oil prices stoked inflation worries and strengthened expectations that the Bank of England will keep interest rates higher for longer. Brent crude climbed above $90 a barrel after the United States and Iran exchanged a series of retaliatory strikes, heightening fears of prolonged supply disruptions. At the same time, markets are closely watching Andy Burnham as he takes office as Prime Minister today. Investor focus is on his choice of Chancellor, with reports that Shabana Mahmood is the frontrunner helping to reassure markets and temper concerns about a more expansionary fiscal stance.