Gilt Yields Near Multi-Year Highs Amid Inflation Fears

UK 10-year gilt yields saw a slight easing to 5.35% as oil prices retreated following reports of a potential US-Iran agreement.

The news sparked a pullback in energy prices, but gilt yields remain near multi-year highs due to ongoing concerns over inflationary pressures.

Markets are still pricing in a high probability of a 25-basis-point Bank of England rate hike in November, according to market expectations.

Deputy Governors Sarah Breeden and Clare Lombardelli, along with MPC member Swati Dhingra, have all hinted at the possibility of raising interest rates in response to rising inflation risks.