UK 10-year gilt yields pared early gains to trade just above 5.2% on Wednesday, after touching their highest level since August 2007, as the oil rally paused and investors digested Prime Minister Andy Burnham’s speech in the House of Commons. Brent crude ended a two-session rally that had lifted prices to a six-week high, as traders weighed persistent Middle East supply risks against signs that crude was still reaching the market. Meanwhile, Burnham reiterated the government’s commitment to fiscal responsibility and reducing debt, while saying the early budget date was intended to limit speculation. Markets continue to price in a 25bp BoE rate hike by year-end, with expectations reinforced by accelerating UK shop-price inflation. In the US, markets are pricing a 66% probability of a September hike following hawkish remarks from Fed Chair Kevin Warsh and this week’s rise in oil prices.