FX.co ★ UK Gilt Yield Holds Near Two-Month High After BoE Decision

The UK 10-year gilt yield remained above 5.0%, hovering near last week’s two-month high after the Bank of England voted 6–3 to keep the Bank Rate unchanged at 3.75%. Markets had expected a 7–2 split. The BoE cautioned that higher energy costs are likely to push inflation higher later this year, with risks now skewed to the upside, although the outlook remains highly dependent on developments in the Middle East. At the same time, renewed US airstrikes on Iran drove oil prices higher and dampened risk sentiment, while the Federal Reserve added to market uncertainty by leaving interest rates on hold despite three FOMC members dissenting in favor of a hike.