The UK 10-year gilt yield remained slightly below 5.15%, down from recent 19-year highs, amid a decline in oil prices. Investors were also assessing stronger-than-expected US employment data while positioning for the outlook for monetary policy. US nonfarm payrolls rose by 162,000 in August, significantly exceeding market expectations for a 56,000 increase and prompting markets to price in a near 58% probability of a Federal Reserve rate hike this month. In the UK, markets are fully pricing in a Bank of England rate hike by year-end, with another increase expected by March 2027, amid persistent concerns over inflation and the UK’s fiscal sustainability. BoE Chief Economist Huw Pill said that raising interest rates now could reduce the risk of the central bank having to tighten policy more aggressively later to contain inflation, which has risen amid the fallout from the Iran war.