Escalating conflict between the United States and Iran is amplifying concerns over global inflation, driving UK government bond yields to their highest levels in years. Efforts to restart shipping operations in the Strait of Hormuz have yet to succeed, fueling market fears that disruptions to oil supplies could persist for an extended period, thereby pushing energy costs higher.

Federal Reserve Chair Warsh added to the selling pressure on Friday by issuing a stark warning about inflation risks. The yield on the 10-year UK gilt climbed to 5.224%, its strongest level since 2008, while the 30-year bond yield surged to 5.871%, marking a peak not seen since 1998.