US and UK government borrowing costs are rising this morning, as Brent crude oil touches $108 a barrel amid uncertainty around the US-Iran war.

The yield on the US 10-year treasury is up 5 basis points to 5.23%, while the UK 10-year gilt has followed it up 5 basis points to 5.4%.

Even though US-Iran talks could resume this week, there was little sign of a breakthrough over the weekend and bond yields and oil have climbed again this morning.

Iran reiterated on Sunday that it would not soften its conditions for reopening the strait of Hormuz, with Foreign Minister Abbas Araghchi insisting that Tehran would not back down from demands including sanctions relief, access to frozen assets and an end to US blockade measures. Meanwhile President Trump said he still expected negotiations to continue but rejected Iran’s latest proposal as inadequate. So a stalemate but if you’re looking for some positives it’s that there does still seem to be a line of communication open.

I’ve ​said let’s not send ‌out the diesel. ‌We make a lot of diesel … I’ve called for it. ‌I’ve called for it within my people.

We’re examining whether it’s feasible in terms of the overall refining capacity and whether a full or partial ban would work.”