Oil surge and bond sell-off push UK gilt yields higher, rattling FTSE 100
Oil prices jumped above $102 a barrel after reports of U.S. plans for pre-election strikes on Iran, sparking a global bond sell-off and lifting the UK 10-year gilt yield to 5.45%.
Brent crude breached the $102 per barrel mark after reports that the Trump administration instructed the Pentagon to develop pre-midterm election strike options targeting Iran. The sharp oil rally fed into a global bond sell-off, pushing the UK 10-year gilt yield up ten basis points before it eased slightly to end seven basis points higher at 5.45%, a setback for the government's borrowing costs. The turbulence left the FTSE 100 jittery, with investors closely watching the market’s reaction.
In related financial news, money-market funds saw a surge in demand as traders sought safety amid volatility. Virgin Media O2 defended a contested £200 million arena transaction, while a Goldman-linked EY data breach highlighted new challenges in cyber-theft detection, and Saudi Arabia's PIF reiterated openness to sports investments despite recent cutbacks.
Why it matters
Higher oil prices and rising gilt yields increase borrowing costs and market uncertainty for investors and the UK government.
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