UK 10-Year Gilt Yield Holds Decline

The UK 10-year gilt yield held near 4.90%, down more than 10 basis points this week as easing energy prices reduced expectations of further monetary tightening. Sentiment improved after Iran announced an agreement with Oman on a proposed shipping route through the Strait of Hormuz, raising hopes that energy flows through the critical waterway could resume. However, a broader US-Iran deal remains uncertain, with President Donald Trump saying he would “see what happens” in ongoing negotiations. Lower oil prices have eased concerns over inflation and weaker economic growth, reinforcing expectations that the Bank of England will maintain a gradual approach to policy tightening. That view was strengthened by last week’s Bank of England meeting, where Governor Andrew Bailey downplayed the need for further rate hikes, arguing that the disinflation process remains on track despite persistent geopolitical uncertainty.


