This is very common after a cold winter and lots of bays suffered badly in the winter this year, some killed right back to the base. But it is less usual for the bay to be turning yellow in August.
Bays are Mediterranean plants and it could be you have just had so much rain that it is sitting with its roots in very wet soil. Could this be the case? If it is, then you could improve drainage around the tree, but otherwise you will just have to wait for the abnormal weather conditions to return to normal.