UK Gilt Yields Stay Near Multi-Decade Highs
UK 10-year gilt yields remained above 5.4%, close to a recent 19-year high, as investors weighed easing oil prices against hawkish remarks from Bank of England policymakers. Brent crude retreated as Middle East supply concerns eased after US President Donald Trump ruled out an attack on Iran before the November midterm elections, citing productive talks to end the conflict. Meanwhile, BoE Chief Economist Huw Pill said central banks must remain focused on controlling inflation, while MPC member Megan Greene warned that UK wage growth could reach around 3.5% in 2027, potentially sustaining inflationary pressures and increasing the need for further rate hikes. Governor Andrew Bailey also stressed that central banks must remain focused on bringing inflation down. Markets are pricing in a BoE rate hike in November, as the Bank remains the only major central bank yet to begin tightening monetary policy in response to inflationary pressures stemming from the US-Iran war.
4%, close to a recent 19-year high, as investors weighed easing oil prices against hawkish remarks from Bank of England policymakers. Brent crude retreated as Middle East supply concerns eased after US President Donald Trump ruled out an attack on Iran before the November midterm elections, citing productive talks to end the conflict. 5% in 2027, potentially sustaining inflationary pressures and increasing the need for further rate hikes. Governor Andrew Bailey also stressed that central banks must remain focused on bringing inflation down.
Markets are pricing in a BoE rate hike in November, as the Bank remains the only major central bank yet to begin tightening monetary policy in response to inflationary pressures stemming from the US-Iran war.