The UK 10-year gilt (government bond) yield eased toward 5.35%, pulling back from recent 19-year highs after oil prices paused their rally and inflation data matched expectations. Annual inflation accelerated to 3.1% in August from 2.9% in July, mainly because of higher fuel costs. Core CPI (inflation excluding food and energy) held at 2.6%, while services inflation came in at 3.4%, below the 3.5% forecast. Markets expect the Bank of England to leave rates unchanged on Thursday, although a November increase remains broadly priced in with less conviction. Expectations for rate increases through the end of next year have also fallen to four from five. Oil prices declined from four-month highs after US crude inventories unexpectedly increased, despite expanding supply disruptions across the Middle East.