FX.co ★ UK Gilt Yields Fall as Lower Oil Prices Ease Inflation Concerns

UK 10-year gilt yields slipped to 4.99% as falling oil prices eased worries about inflation and the need for further interest rate increases. Crude prices declined on hopes that the US and Iran could reach an agreement to reopen the Strait of Hormuz, after Washington called off planned strikes against Iran. President Donald Trump also indicated that negotiations with Tehran would resume on Monday, reducing concerns about a further escalation of the conflict. At the same time, last week’s Bank of England policy meeting reinforced the view that policymakers are in no hurry to tighten monetary policy, leading markets to scale back expectations for interest rate hikes in 2026.