UK 10-year gilt yield holds above 5% as Knight Frank warns of fresh pressure on mortgage rates

The UK 10-year gilt yield held above 5% for most of last week, its highest since 2008, driven by inflation worries and Labour leadership uncertainty. Because lenders price fixed mortgages off swap rates that track gilts, sustained pressure here typically flows through to costlier fixed deals within weeks. For buyers, the recent run of rate cuts looks at risk of stalling. Knight Frank has already downgraded its 2026 UK house price growth forecast to 1.5%.