FX.co ★ UK Gilt Yields Hold Above 4.9% on BoE Hike Bets

UK 10-year gilt yields remained above 4.9%, hovering near their highest levels since June 10, as traders increased bets on further Bank of England rate hikes amid escalating US-Iran tensions. Markets also weighed recent comments from US President Donald Trump, who said Iran still "badly" wants to strike a deal. Crude prices climbed to two-week highs on Wednesday following fresh US strikes in Iran, after Trump declared the Iran ceasefire over, raising doubts about the durability of the peace process and intensifying inflation concerns. Investors now fully price in a 25-basis-point BoE rate increase by year-end, with December seen as the most likely timing. On the political front, Andy Burnham, the leading contender to succeed Keir Starmer as prime minister, has yet to name a finance minister, though former energy minister Ed Miliband is widely viewed as the frontrunner. Sterling’s resilience throughout the recent political turbulence suggests that much of the negative news is already reflected in the currency.