The yield on 10-year UK government bonds drops to a six-week low.

(1) The yield on the UK 10-year government bond has further fallen below 5.3%, reaching its lowest level since September 22, supported by declining oil prices and expectations regarding the Bank of England's policy decision later this week. (2) Brent crude dropped below $110 per barrel after reports emerged that US President Trump is prepared to allow more time for diplomatic efforts with Iran following Tuesday’s midterm elections before considering further military action. (3) Meanwhile, investors continue to welcome Chancellor John Healey's first budget announced last week, which adhered to the government's self-imposed borrowing rules and largely reassured the market. (4) The market generally expects the Bank of England to implement the first interest rate hike since 2023 on Thursday, due to inflationary pressures related to the Iran conflict and signs of resilience in the UK economy. (5) However, policymakers are also expected to push back against market expectations for multiple rate hikes next year.