UK gilt yields hit 4.91% as oil spike raises borrowing costs for debt-heavy government

The UK 10-year gilt yield climbed to 4.91% on July 7, driven by Middle East tensions rippling through oil markets and inflation expectations. Oil spiked above $70 a barrel following a U.S.-Iran agreement on the shipping lane. Every basis point of sustained yield increase materially raises annual debt-servicing costs for HM Treasury at a time when the government's debt burden is already substantial. The move hinges on whether oil holds above $70 or retraces as geopolitical risk fades.