2026.03.0908:51:29UTC+00UK 10-Year Gilt Yield Soars to 5-Month High

The yield on the UK 10-year gilt jumped 13 basis points to around 4.70%, its highest level in five months, as investors sharply revised their expectations for Bank of England policy in response to a spike in global energy prices. Crude oil has risen above $100 per barrel, with escalating tensions in the Middle East disrupting supply and effectively halting shipping through the Strait of Hormuz. Given the UK’s pronounced sensitivity to energy costs feeding through into inflation, markets rapidly adjusted their interest rate outlook. Just a week earlier, investors had been pricing in roughly two Bank of England rate cuts this year. Those expectations have now flipped: at one point, traders were factoring in as much as 16 basis points of additional tightening by year-end, compared with 8 basis points of easing previously. Markets are now assigning a meaningful probability to at least one rate hike later this year, including an estimated 20% chance of an increase as early as June.