The UK 10-year gilt yield rose to 4.71% after stronger-than-expected PMI data signaled firm private sector growth. The composite PMI climbed to 53.6 in August, its highest in 12 months, beating forecasts of 51.8 and July’s 51.5. Services drove the expansion with a reading of 53.6, while manufacturing weakened further to 47.3. Firms, especially in services, reported robust price pressures, adding to inflation concerns. July inflation at 3.8% already tempered bets on near-term BoE easing, with markets now pricing a 57% chance of the Bank Rate holding at 4% through year-end and a 75% probability of a cut to 3.5% by end-2026. Elevated borrowing costs complicate Chancellor Rachel Reeves’ autumn budget planning, likely requiring spending cuts or tax hikes. Meanwhile, the UK budget deficit narrowed in July, offering some fiscal relief. Global focus shifts to Powell’s Jackson Hole speech after Fed minutes stressed inflation risks, while the ECB is expected to hold rates at 2%.