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 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.