UK Gilt Yields Slide as Rate-Hike Bets Ebb

The UK's 10-year gilt yield has retreated from its recent highs after the Bank of England rate-hike bets eased, following a pause in the oil price rally and an in-line inflation report.

The UK annual inflation rate accelerated to 3.1% in August, as widely expected, from 2.9% in July, largely due to higher fuel costs.

However, core CPI remained unchanged at 2.6%, while services inflation came in at 3.4%, slightly below the 3.5% expected by markets.

No change to UK interest rates is anticipated at Thursday's meeting, and a hike remains broadly priced for November, albeit with less conviction.