UK Bonds Steady, With 10-Year Yield Holding Near Multi-Year High

UK bonds edged higher on Monday, though yields remained near multi-year highs as investors weighed the fiscal implications of Manchester Mayor Andy Burnham potentially challenging for UK Prime Minister.

Gilt 10-year yields fell two basis points to 5.15%, while their 30-year peers — which are more sensitive to changes in government spending plans — slipped three basis points to 5.82%. Traders are also factoring in stubbornly high oil prices and their knock on effect to inflation expectations as the war in the Middle East shows no signs of ending.