UK government bonds face their toughest month since Truss's downfall

Golden Ten Data reported on March 23rd that, due to the war in the Middle East causing energy prices and yields to rise, UK government bonds are facing their worst month since the major crisis that led to the resignation of former Prime Minister Truss. An index that tracks the performance of traditional UK government bond portfolios has fallen by nearly 5% this month, marking the largest drop since September 2022, when it declined by 8%. This sell-off has reduced the market value of the benchmark index by £108 billions, with its market capitalization standing at £1.63 trillions as of the close on Friday. For British bond investors, this represents a significant shift. The benchmark index delivered a 5% return in 2025—making it the best-performing year since 2020. Since the US and Israel launched attacks on Iran, the global bond market has been severely hit, and UK government bonds have performed the worst. The UK's reliance on imported energy makes it particularly vulnerable to supply disruptions.