The UK’s 10-year gilt yield retreated to 4.95% after briefly spiking to 5.096%, its highest level since July 2008, as market tensions eased following President Trump’s decision to delay planned strikes on Iran by five days. The postponement, described as a response to "very good and productive" talks with Tehran, offered temporary relief ahead of a 48-hour US deadline for Iran to reopen the Strait of Hormuz.
Despite this respite, investors are still pricing in multiple Bank of England rate hikes in 2026, abandoning pre-war expectations of two cuts, as policymakers place a premium on containing inflation given the UK’s vulnerability to energy supply disruptions. Market focus now turns to upcoming data releases—including February CPI, retail sales, March PMI, and consumer confidence—which may further shape the central bank’s policy outlook amid the continuing crisis.
