FX.co ★ UK 10-Year Gilt Yield Little Changed

The yield on the UK's 10-year gilt hovered around 4.5% as investors processed increasing geopolitical tensions, varying economic data, and cues from central banks. The recent US military actions against Iran over the weekend have heightened global uncertainty, driving a preference for safer assets while also raising concerns about inflation. On the economic front, UK private sector activity in June exceeded expectations slightly, with the S&P Global Composite PMI edging up to 50.7. Although manufacturing remained in contraction, it performed better than anticipated, and services expanded in line with forecasts. All sectors showed improvement from May. Last week, the Bank of England's decision to keep rates unchanged underscored a cautious approach in the face of ongoing inflation and geopolitical uncertainties. However, the vote split (6–3) surprised the markets, as three members advocated for a rate cut. The BoE emphasized "two-sided risks" to inflation and projects that price growth will remain persistent before gradually moving toward the 2% target by 2026.