UK Prime Minister Starmer Chairs Emergency COBRA Meeting as Iran War Risks Mount

UK Prime Minister Keir Starmer calls emergency talks with the Bank of England and Treasury. Gilt yields surge past 5% as energy security and inflation risks mount.

By: AXL Media

Published: Mar 23, 2026, 6:29 AM EDT

Source: Reuters

The Gilt Market "Storm"

The UK is currently experiencing a more severe decline in government bonds (gilts) compared to its international peers. This vulnerability stems from a combination of stretched public finances and a heavy reliance on imported natural gas.

Yield Surge: On Friday, the 10-year gilt yield climbed past 5% for the first time in nearly two decades.

Policy Shift: Market expectations have "shifted violently" away from anticipated interest rate cuts. Investors are now pricing in aggressive rate hikes by the Bank of England to combat the energy-driven inflationary pulse.

Inflation Forecast: Economists warn that the current supply shock could propel the UK inflation rate back to 5% later this year, far exceeding the BoE’s 2% target.

Energy Security and Targeted Support