UK Gilt Yields Plummet Amid Energy Inflation Fears

UK Gilt Yields Extend Decline Amid Energy-Driven Inflation Concerns

The UK's 10-year gilt yield fell to 5.15% on Friday as investors awaited fresh direction from US employment data.

This decline in yields comes despite concerns over energy-driven inflation and the UK's fiscal sustainability, which have kept gilts elevated.

Markets are now fully pricing in a Bank of England rate hike by year-end, with another increase expected by March 2027.

According to BoE Chief Economist Huw Pill, raising interest rates now could reduce the risk of the central bank having to tighten policy more aggressively later to contain inflation.