The UK 10-year gilt (UK government bond) yield eased toward 5.35% on Friday as the energy price rally paused before a key US CPI report. The report could reinforce expectations of a Federal Reserve rate hike next week. Despite the retreat, gilt yields remained close to 19-year highs and were on course for a weekly increase of more than 20 basis points. Investors also assessed stronger-than-expected UK economic growth, with July GDP rising 0.4% month on month and services leading the expansion. Growth across the three months to July was 0.4%, matching the previous period. Brent crude remained near a four-month high, while UK natural gas prices stayed close to a 3.5-year high, raising concerns about renewed inflationary pressure. Markets are fully pricing four Bank of England rate hikes by the end of 2027, although Governor Bailey has stressed that future decisions will depend on economic and geopolitical developments.