Analyst: Due to the rise in yields, British investors may prefer government bonds over stocks.

Russ Mould of AJ Bell said in a report that following the Middle East conflict, UK government bond yields have risen, which could lead investors to favor relatively safer assets over higher-risk UK stocks. He stated that if safer options can provide better returns, the rise in UK government bond yields may deter investors from taking on more risk by investing in stocks or other higher-risk assets. "The higher the UK government bond yields, the less inclined investors may be or feel the need to pay a premium for alternative asset classes such as stocks." According to Tradeweb data, the 10-year UK government bond yield rose to a near 18-year high of 5.118% this week, before falling back to the latest reported rate of 4.843%.