UK 10-year gilt yields approached 4.9%, close to their highest level since 2008, as escalating US-Iran tensions and surging oil prices intensified concerns over inflation. Diplomatic efforts remain stalled, with no new peace talks scheduled and both sides locked in a dispute over the Strait of Hormuz. President Trump extended the April 7 truce indefinitely, awaiting a new proposal from Iran, though Iranian officials have ruled out immediate negotiations, pushing Brent crude above $103 per barrel. Domestically, Morgan McSweeney, former chief of staff to Prime Minister Keir Starmer, will testify next week regarding allegations over the vetting of Peter Mandelson. Labour MP Jonathan Brash intensified pressure on Starmer, arguing that the Mandelson scandal has crippled governance and made the PM’s resignation unavoidable. On the fiscal front, the UK’s March budget deficit reached £12.6 billion, the lowest for March since 2022 but still exceeding the forecasted £10.4 billion.
