FX.co ★ UK 10-Year Gilt Yield Edges Down

The UK 10-year gilt yield retreated to around 4.97% as investors weighed stronger-than-expected economic data, the interest-rate outlook and persistent geopolitical risk in the Middle East. UK GDP grew 0.4% quarter-on-quarter in the second quarter, matching forecasts, after a 0.6% expansion in the first quarter. June GDP rose 0.3% month-on-month, exceeding expectations, although household consumption growth slowed to 0.2% in Q2. On the monetary policy front, the Bank of England kept interest rates on hold in July, with Governor Andrew Bailey stating that the disinflation process remains on track despite ongoing external risks. In the US, recent data have strengthened expectations that the Federal Reserve may refrain from raising rates at its next meeting. At the same time, uncertainty over the US-Iran conflict and the situation in the Strait of Hormuz persists, with limited progress reported toward reopening this key shipping corridor.