UK 10-year gilt yields fell below 5%, hovering near their lowest level since August 14, as falling oil prices raised hopes that the Strait of Hormuz could reopen and reduce inflation pressure. Iran held talks with Oman on reopening the strait, while Oman’s foreign ministry said a temporary corridor could be announced soon. Unverified reports suggested the US and Iran could reach a new ceasefire agreement in the coming days. Yields remain elevated, however, amid expectations for Bank of England rate hikes this year, persistent inflation and rising government debt. UK inflation accelerated to 2.9% in July, its highest level since March, and is expected to rise further toward year-end. Investors will also watch the government’s first budget under Andy Burnham in October and plans announced Tuesday to spend £10 billion on lower-cost housing for renters, focused on London.