War Turns UK Bonds From Market Favorite Into Thorny Trade

The gilt market has become more prone to wild swings due to concerns around the nation’s fiscal outlook.Photographer: Jason Alden/Bloomberg

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By Alice Atkins, Naomi Tajitsu, and Will Standring

April 10, 2026 at 8:05 AM UTC

Updated on

April 10, 2026 at 11:49 AM UTC

The appeal of UK bonds is being put to the test by surging volatility, with money managers warning that one of the most popular trades in recent months now requires nerves of steel.

Britain’s government bond market has been more turbulent than peers in Europe and the US during the Middle East war, and volatility has remained elevated even after this week’s ceasefire deal. Since the beginning of March, two-year gilt yields, which have been especially sensitive to the geopolitical news, have moved by a tenth of a percentage point or more in 12 sessions, marking the most unstable period since the 2022 UK government credibility crisis.