Published on 6/15/2026
The cost of borrowing in Britain fell today, Monday, to its lowest level since last April, after announcing that an understanding had been reached between the United States and Iran to stop the war.
The British newspaper “The Telegraph” reported that the yield on 10-year British government bonds, which is one of the most important means used by the British Treasury to borrow from the markets, fell from 4.84% to 4.77%.
Read also
list of 4 itemsend of list
The decline coincides with the decrease in interest on British Treasury bonds, with a decline in oil prices by 4.8% to $83.15 per barrel of Brent crude, according to data from the Financial Times, which is the lowest oil price since last March.
US President Donald Trump announced the end of the naval blockade on Iran, paving the way for the return of navigation to its usual form in the Strait of Hormuz, through which about a fifth of the world’s energy supplies pass.
Declining expectations for a rate hike
The decline in oil prices leads to a decrease in the cost of transportation and production, which means a decline in the level of inflation, which reduces pressure on the Bank of England (the central bank) to raise interest rates in order to control the rise in prices.
Reducing the interest rate contributes to alleviating the burden of servicing the British government’s huge debt, which amounts to about 3 trillion pounds (about 4.02 trillion dollars), according to what the Telegraph reported.
The rise in energy prices after the outbreak of the Iran War put British Treasury Secretary Rachel Reeves facing a financial dilemma, as the cost of borrowing rose on the one hand, and government expenditures increased to support families in the face of increased energy prices on the other hand.
Traders in the financial markets reduced their expectations that the British Central Bank would raise interest rates, according to the Telegraph, as the financial markets expect only one increase in interest rates this year from 3.75% to 4%, which may occur next December.
Stock market indices rise
Trump’s announcement of reaching an understanding to stop the war with Iran led to a rise in the STOXX-600 index of European company stocks, which had declined during the war period, reaching a record level of 641.66 points at the beginning of trading today, before trimming its gains to record an increase of 0.7% during the day, according to what the “Financial Times” reported.
The French CAC index (Paris Stock Exchange) rose by 1.1% during Monday’s transactions, and the DAX index on the Frankfurt Stock Exchange rose by 1.2%.
Traders in European stock exchanges believe, according to the Financial Times, that stopping the war in the Middle East will lead to a rapid decline in energy prices, which will reflect positively on the European Union countries that depend on importing oil to meet more than 90% of their needs for manufacturing and home consumption, which will lead to a decrease in companies’ costs and an increase in their profit opportunities.
