Europe's sovereign bonds are facing a "perfect storm" as inflation fears rise due to the Iran conflict, leading to the Bank of England maintaining its interest rates at 3.75%. The European Central Bank also held steady on borrowing costs. Yields on 10-Year Gilts, the benchmark for U.K. government debt, rose more than 13 basis points to a new 52-week high before easing. Ed Hutchings, head of rates at Aviva Investors, suggested that the chances of a rate hike from the BoE have increased. Meanwhile, the ECB's next move is likely to be a hike, according to Simon Dangoor, deputy chief investment officer of fixed income and head of Fixed Income macro strategies at Goldman Sachs Asset Management. However, Nicholas Brooks from ICG suggested that oil would need to remain above $100 for an extended period before the ECB considered hiking.