1525 GMT - Investors are selling off U.K. government bonds, or gilts, sharply and this highlights the vulnerability of the economy, Aberdeen's Matthew Amis says in a note. Markets are concerned that high energy costs from the Middle East war will push up U.K. inflation and cause the Bank of England to raise interest rates. Money markets now price in the possibility of three BOE rate rises in 2026, a major shift from two rate cuts priced in prior to the Middle East war, LSEG data show. Possible deescalation in the Middle East war could restore investor confidence and lead to demand for gilts, Amis says. Ten-year gilt yields jump to a near 18-year high of 5.022%, LSEG data show. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
March 20, 2026 11:25 ET (15:25 GMT)
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