The UK 10-year gilt yield rose above 5.3%, its highest level since August 2007, as markets strengthened expectations for further Bank of England rate increases amid renewed inflation concerns. Rising energy prices, an ECB rate hike and a more hawkish inflation outlook added to pressure on UK borrowing costs. Brent crude moved above $100 a barrel, while UK natural gas prices reached their highest level since late 2022 as escalating Middle East tensions heightened concerns about energy supplies. Markets are fully pricing four Bank of England rate increases by the end of 2027, although Governor Andrew Bailey rejected the view that another increase is inevitable and said future decisions would depend on changing economic and geopolitical conditions. The ECB delivered its expected rate hike in the Eurozone, lifted its inflation forecasts for the next two years and warned that inflation could remain above its 2% target for an "extended period."