A rebound in oil prices has increased inflation expectations and raised the
probability of a Bank of England rate hike later this year, pushing UK gilt
yields higher. UK annual inflation slowed to 2.6% in June from 2.8% in May after
a temporary June oil dip following a US–Iran ceasefire; with the Middle East
conflict flaring again, oil has resumed rising. Brent was up 2.4% at $93.30 per
barrel; the UK 10-year gilt yield rose 1.3 bps to 5.041%.