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2026-07-16 19:48:12
[Middle East Conflict Worsens UK Bond Market, New Government's Fiscal Plans Become Key to Market Confidence] ⑴ Analysts point out that the ongoing Middle East conflict, coupled with market concerns about UK public finances, may continue to put pressure on UK government bonds, with the yield curve facing upward risks. ⑵ Market focus is shifting to the spending commitments and revenue-generating plans expected to be announced by the new government in the coming weeks or months, with investors becoming increasingly critical of fiscal sustainability. ⑶ Analysts warn that the market is highly sensitive to signs that spending commitments may exceed available resources, and any signs of fiscal loosening could trigger a new round of selling pressure. ⑷ The yield on 10-year UK government bonds rose another 1.8 basis points to 4.968% on the day, with geopolitical risks and domestic fiscal concerns creating a double whammy, leaving the UK bond market sentiment still fragile.
