UK 10-year gilt yields climbed to 4.94%, approaching 2008 levels, as oil prices surged with the Strait of Hormuz effectively blocked and US-Iran peace talks stalling over the weekend. Iran proposed reopening the strait and ending the conflict, but with nuclear negotiations postponed after US President Donald Trump canceled a delegation’s trip to Pakistan for Iran talks. Investors are also preparing for a week of critical economic data and central bank decisions. The Bank of England is expected to hold rates steady, following last week’s UK inflation report, which showed CPI rising 3.3% year-over-year in March, driven by soaring motor fuel prices, prompting markets to shift from pricing in one rate hike this year to at least two, with a potential third. Politically, uncertainty looms ahead of the May 7 local elections, compounded by mounting pressure on Prime Minister Keir Starmer over his controversial appointment of Peter Mandelson as US Ambassador.
