UK borrowing costs fall as oil prices retreat on possible end to Iran war

LONDON, May 6 (Reuters) - British government bond yields eased on Wednesday and investors slightly trimmed their interest rate hike expectations as oil prices fell on hopes the Iran war could end after U.S. President Donald Trump indicated a possible peace deal may be reached.

Gilt yields fell around 5 basis points across the maturity range in early trade on Wednesday. That was in contrast to moves on Tuesday, when 30-year gilt yields GB30YT=RR rose to their highest since 1998.

Traders are closely watching local elections taking place in Britain on Thursday which could add to the pressure ​on Prime Minister Keir Starmer and raise questions about the country's future fiscal policy if he is replaced as leader of the governing Labour Party.



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