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The ongoing Iran crisis has led to heightened energy prices, resulting in an inflationary shock that is negatively affecting the UK gilt market. Investors had anticipated rate cuts in the UK, but the surge in energy costs has diminished that optimism. Consequently, popular hedge fund trades have also been adversely impacted. Market participants are now reassessing their positions as the geopolitical situation evolves. Overall, the crisis is fostering uncertainty, particularly in bonds and related assets.