The UK 10-year gilt yield climbed to 4.55%, its highest level since February 5, and is on track for a 32-basis-point weekly increase as investors react to mounting inflation risks stemming from the escalating conflict in the Middle East. Rising regional tensions have intensified fears of disruptions to global crude oil supply, driving energy prices higher and likely keeping inflation elevated across Europe. As a result, expectations for Bank of England rate cuts have diminished: UK money markets now assign less than a 20% probability to a cut this month, and UK rate futures imply under a 50–50 chance of even one cut by the end of 2026. Earlier in the week, the Office for Budget Responsibility lowered its UK growth forecast for 2026 to 1.1% from 1.4%, before factoring in any potential energy-price shock. However, growth projections for 2027 and 2028 were raised to 1.6%, reflecting anticipated declines in borrowing costs and more moderate inflation.