UK bond yields return to weekly highs as $100 oil prices reignite inflation concerns

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智通财经2026/09/09 10:01

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On Wednesday, the yields on both the UK 2-year and 5-year government bonds climbed to a one-week high, with the 2-year yield reaching 4.629% and the 5-year yield hitting 4.727%. Both increased by over 3 basis points in a single day. Earlier in September, the 2-year yield had reached a 5-month high of 4.691%, while the 5-year yield touched a 3-year peak of 4.785%.
Brent crude oil surpassed the $100 per barrel mark for the first time in six weeks, reigniting market fears that energy shocks could hamper the disinflation process. Analysts noted this may force the central bank to maintain a restrictive policy stance, even though institutional surveys indicate most economists expect the Bank of England to hold rates steady both next week and throughout the rest of the year.
The financial markets have now priced in about a 70% chance of a rate hike before the November meeting. However, on Tuesday, Bank of England Governor Bailey made it clear that market pricing only reflects the risks from energy pressures, and the central bank itself has not signaled an imminent rate increase.
On the same day, the yield on the benchmark 30-year UK government bond auction reached 5.817%, the highest borrowing cost since 1998. This adds extra pressure to the Chancellor’s first budget scheduled for next month. The focus will now be on how quickly energy prices feed through to services inflation, and whether wage data can give the central bank room to pause.

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UK bond yields return to weekly highs as $100 oil prices reignite inflation concerns

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