The UK 10-year gilt yield held at 4.75%, its highest in three months, after July inflation rose more than expected, reducing bets on further Bank of England easing. Annual CPI accelerated to 3.8% from 3.6% in June, above forecasts of 3.7%, while core inflation also hit 3.8%. The jump, driven by fuel, food, and transport costs, pushed inflation to an 18-month high and raised doubts over the pace of rate cuts. With prices unlikely to peak until later this year, the BoE’s room to cut rates is seen as “severely limited.” Markets now price only a 40% chance of another reduction in 2025, compared with expectations of a full quarter-point cut earlier this month. Traders scaled back bets after the BoE’s narrow vote for July’s 25 bp cut, as several policymakers warned about second-round wage and price effects. Resilient growth and labor market data since then have strengthened the case for caution, keeping yields elevated.