UK government bond yields have increased due to heightened inflation risks stemming from high oil prices and prolonged energy supply disruptions. According to Jin10, the Strait of Hormuz remains closed amid the ongoing conflict between the United States and Iran, causing a global energy supply shock. LSEG data indicates that investors have fully priced in two interest rate hikes by the Bank of England in 2026 to address inflation. The Bank of England is expected to keep rates unchanged in its decision announcement on Thursday. Tradeweb data shows that the yield on 10-year UK government bonds rose by 3.6 basis points, currently standing at 4.964%.