The UK 10-year gilt yield climbed back to around 4.55%, remaining close to the near four-month high of 4.59% reached earlier this week, as investors scaled back expectations for further interest rate cuts from the Bank of England this year. Rising geopolitical tensions linked to the Iran conflict have pushed energy prices higher and revived inflation concerns, prompting markets to reassess the outlook for monetary easing. Although oil prices have retreated from peaks above $100 per barrel, the earlier surge has been enough to significantly alter rate expectations. Money markets are now pricing in very little chance of rate cuts this year, a sharp shift from before the conflict, when investors had been anticipating around two reductions. Investors are also turning their attention to upcoming UK economic data, particularly the release of monthly GDP figures on Friday.
