The UK 10-year gilt yield slipped slightly to 4.44%, as global bond markets regained some composure following yesterday’s sharp long-end selloff in Japan. Investors’ attention turned to a series of UK economic indicators. Annual inflation rose to 3.4% in December, up from November’s eight-month low of 3.2% and exceeding market expectations of 3.3%. Core inflation held steady at 3.2%, in line with forecasts, while services inflation, closely watched by the Bank of England as a measure of domestic price pressures, edged up to 4.5% from 4.4%, a smaller-than-expected increase. The data followed a labor market report showing the unemployment rate remained at a pandemic-era high of 5.1%. Elsewhere, investors continued to monitor rising US–Europe tensions, after President Donald Trump suggested Europe would be unlikely to “push back too much” while warning of potential additional tariffs on eight European countries unless the US is allowed to “buy” Greenland.