UK Bond Yields Rise Amid Middle East Conflict

UK 10-year government bond yields have climbed to a 3.5-week high as the Middle East conflict continues. According to Jin10, U.S. Treasury Secretary Besant announced a temporary measure to ease oil supply pressures, which initially caused oil prices to dip before they rose again slightly. The elevated oil prices have heightened market concerns about inflation risks, potentially hindering the Bank of England's ability to cut interest rates. A report from RBC's rate strategist noted that all eyes are currently on the energy market. LSEG data indicates that the UK money market now sees only a 17% probability of a Bank of England rate cut in March, significantly lower than the 83% expectation before the conflict began.