The bond sell-off that pushed the 30-year gilt yield to 6% on Thursday could unwind fast if the oil price retreats.
Oil is the single biggest swing factor for inflation expectations, and gilts have already shown how sharply they respond when crude eases.
On 16 September, as oil dipped, the 2-year gilt yield posted its biggest one-day fall since May.
A Middle East ceasefire that took Brent crude back towards $90 a barrel, from about $100 now, could trigger a similar move on a larger scale.
The Budget test
Chancellor John Healey's first Budget on 28 October is the other potential turning point.
A fiscally tight package could reassure bond investors that the government will not loosen its borrowing rules.
Handelsbanken economists said the jump in yields already makes tax rises more likely.
There is a recent precedent: gilts rallied sharply after the November 2025 Budget, when the Office for Budget Responsibility's headroom figure came in better than expected.
Rate bets can swing
Markets price close to an 80% chance that the Bank of England raises rates to 4% on 5 November.
Those expectations have shifted sharply in weeks, and the Bank's own June survey of market participants expected rates of 3.25% two to three years out.
Underlying UK inflation offers some comfort, with core inflation, which strips out energy and food, steady at 2.6% in August.
Bank policymaker Alan Taylor has played down the need for higher rates.
In the US, softer inflation data on 30 September led traders to pare back bets on an October rise from the Federal Reserve.
New York Fed President John Williams has said there is time to assess the data before moving again.
A range, not a cliff edge
Luke Hickmore of Aberdeen sees 10-year gilt yields in a range of 5% to 5.5% over the next six months, with 6% a credible outside risk.
That risk only becomes his central case if oil goes above $110 or the Budget "materially loosens the rules".
Savers are buying
For savers, the sell-off has created the highest guaranteed returns since the late 1990s.
A 10-year gilt now pays about 5.5%, and a 30-year about 6%, with no company risk attached.
Retail investors have noticed, with gilt purchases on the Freetrade platform hitting their highest level of the year on 1 September.
Low-coupon gilts have proved popular because most of their return comes as a capital gain, which is free of tax.
Higher long-term yields also feed through to annuity rates, the guaranteed incomes retirees buy with their pension pots.
Fund managers argue that locking in today's income is an opportunity rather than a threat.
Goldman Sachs takes a similar line on shares, saying 5% yields are a reason to change strategy rather than turn bearish.
