finance
UK 10-Year Gilt Yield Tops 5 Percent as US-Iran Fighting Resumes and Oil Surges
The UK 10-year government bond yield climbed as much as seven basis points on July 14 to top 5 percent for the third time since the Iran war began. Brent crude surged more than 9 percent the prior day after the US and Iran traded strikes for a third straight night.
Jul 14, 10:00 AM·1m read1 source
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com reported. The move followed the collapse of a 60-day ceasefire agreed in June between the US and Iran. Brent crude surged more than 9 percent on July 13, its largest one-day gain since May 2020, after the two countries exchanged strikes for a third successive night.
The US military carried out another offensive on Iranian military sites. Iran’s military command stated the offensive would continue imposing a heavy cost on Iranian forces and degrade their ability to attack commercial shipping. President Trump reinstated the US blockade of Iranian ships in the Strait of Hormuz.
The UAE reported two tankers struck by Iranian missiles. The 10-year US Treasury yield climbed more than five basis points on July 13. Britain’s two-year gilt yield rose 10 basis points to trade above 4.5 percent for the first time since mid-May.
Traders priced in a full Bank of England rate hike by year-end. Markets implied a 40 percent chance that the Federal Reserve Open Markets Committee will hike rates when it meets in July 2026. The sell-off has been particularly pronounced in the UK due to the country’s heavy reliance on imported energy and stubborn underlying inflation, OilPrice.com reported.
Daniel Mahoney, senior UK economist at Handelsbanken, stated that UK gilts have been especially volatile since the start of the Iran war and the last couple of days have seen outsized movements. Andy Burnham is scheduled to officially become prime minister in the coming days.
The June ceasefire had helped ease pressure on UK public finances, with the 10-year bond yield falling by more than half a percentage point from its May peak.
