The 21-year-old - who signed professional terms last year after coming through the Tigers' youth ranks - has made just 5 appearances in senior football, and so joins the U's on a month's loan to gain first team experience. He will link up with forward Daniel Webb, who is also on a month's loan at the Abbey Stadium.
Peat - who can play either in midfield or at left-back - is contracted to City until the end of the current season.
Meanwhile, Steve Burton has returned from a two-month loan spell at Kidderminster Harriers. He played 8 times - in both defensive and midfield positions - for Jan Molby's side, and scored his first senior goal in their FA Cup win at Woking.
Molby told the Harriers website: "I said when I brought Steve here it was initially to cover for the absence of Scott Stamps, who had a long-term injury.
"Steve has done very well and I hope his two months have benefited him.
"However, Scott is now back to full fitness and it's now time to strengthen in other areas."