UK Bond Rout Pushes Mortgage Rates to Three-Year High as Gilt Yields Hit Decade Peaks

UK swap rates jumped to a three-year high on Wednesday as the five-year swap rate—benchmark for fixed mortgages—surpassed 4.52%, the steepest climb since October 2023. The spike followed a brutal global bond sell-off triggered by renewed Middle East hostilities, with Brent crude holding firm around $95 per barrel and two-year gilt yields surging past 4.5%, signalling investors now expect multiple rate hikes rather than the cuts once priced in for 2026.

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