Mideast war drives up Europe bond yields on inflation risk

Interest rates on government debt in Europe rose on Tuesday in a sign of growing investor concern over the inflation risk from the war in the Middle East.

Following gains on Monday, the yield demanded by investors on the benchmark German 10-year bond crept up 0.09 percent to 2.79 percent.

The British 10-year bond yield reached 4.5 percent, up from 4.4 percent late on Monday.

Oil and gas prices have surged since the United States and Israel launched strikes against Iran on Saturday, prompting Tehran to hit back across the region and disrupting supplies.

Economists have warned this risks driving up inflation in Europe, which depends on the region for its oil and gas.