UK 10-year gilt yields climbed back above 4.9%, recovering from over one-month lows, as renewed US-Iran tensions pushed oil prices higher and intensified inflation concerns. Iran’s Tasnim News Agency reported on Monday that Tehran would halt negotiations with the US over Israeli strikes on Lebanon and fully close the Strait of Hormuz, accusing Washington of "violating the ceasefire on all fronts." Over the weekend, both sides exchanged proposals to revise a draft deal to extend the ceasefire and reopen the Strait of Hormuz, though progress remained uncertain. The geopolitical uncertainty prompted investors to modestly raise expectations for further Bank of England rate hikes this year, with markets now pricing in two increases. Economically, UK house prices fell 0.6% in May, according to Nationwide, a steeper decline than the expected 0.1% and the largest monthly drop since June 2025, driven by weakening consumer confidence and the impact of the Iran conflict on energy prices.