Concerns about inflation are pushing up UK government bond yields.

Due to the soaring energy prices sparking concerns about inflation, the UK government bond yields have further climbed. Danni Hewson of AJ Bell stated in a report that the UK is considered particularly sensitive to energy price shocks, leading to market expectations reflecting high levels of inflation. Data from the London Stock Exchange Group shows that the money markets are expecting a 50% chance of the Bank of England raising interest rates by 25 basis points in 2026. This marks a significant shift, as prior to the conflict in the Middle East, market expectations were for the Bank of England to cut rates. Tradeweb's data shows that the yield on the 10-year UK government bond has increased by 7.1 basis points, reaching a new high of 4.771%.