Sell-off of UK government bonds is more significant compared to similar bonds.

With inflation concerns driving the sell-off of sovereign bonds, UK government bonds have underperformed compared to similar bonds in the US, Eurozone, and Japan. Kathleen Brooks of XTB stated in a report that factors behind the poor performance of UK government bonds include the Middle East conflict, the sharp repricing of market expectations for Bank of England interest rates, and the deteriorating UK public finances. Data from the London Stock Exchange Group shows that the 10-year UK government bond yield has surged by 17 basis points to nearly 5.020%, close to an 18-year high. LSEG data also indicates that the market has fully digested expectations of three rate hikes by the Bank of England in 2026, which contrasts sharply with the two rate cuts expected before the Middle East conflict. Tradeweb data shows that the 10-year German government bond yield has risen by 5.7 basis points to 3.016%, while the 10-year US government bond yield has increased by 8.5 basis points to 4.372%.