Morning Rate Update

Headline

PWLB Rates Hold Steady, Market Takes a Breather

Notice Details

PWLB Interest Rate Notice Number 487/25, AM reset, published at 09:30 on 16 December 2025.

Maturity Rates

• 1y: 4.66% (+4bps)
• 3y: 4.79% (+3bps)
• 5y: 4.99% (+2bps)
• 10y: 5.55% (+1bp)
• 25y: 6.19% (+2bps)
• 50y: 5.96% (+2bps)

Rates have seen slight upward adjustments, particularly in the short to medium term, but nothing too dramatic—just a gentle nudge rather than a full-on sprint.

Market Context

The current yield curve reflects a modest upward slope, indicating a slight increase in borrowing costs for shorter maturities. Today’s economic data reveals that the UK unemployment rate has risen to 5.1%, matching forecasts and marking a notable increase from the previous 5.0%. This uptick in unemployment could influence future monetary policy decisions by the Bank of England. In the news, investor sentiment appears optimistic heading into 2026, as indicated by a Bank of America poll showing confidence in economic growth. However, concerns linger regarding the UK jobs market, particularly for younger demographics, which may weigh on overall economic recovery. The interplay of these factors could keep the gilt market on its toes, albeit with little immediate reaction in rates today.

Calendar Events

TODAY’S RELEASES:

• GBP Unemployment Rate - Actual: 5.1% (Forecast: 5.1%, Previous: 5.0%) - Significant as it reflects the health of the labour market.
• GBP Average Earnings incl. Bonus (3Mo/Yr) - Actual: 4.7% (Forecast: 4.5%, Previous: 4.9%) - Indicates wage growth trends.

REMAINING TODAY:

• Today 10:00: GBP Treasury Gilt 2031 Auction - Previous: 4.09%

THIS WEEK AHEAD:

• Tomorrow, 07:00: GBP PPI Output YoY - Forecast: 0.03
• Tomorrow, 07:00: GBP Core Inflation Rate YoY - Forecast: 3.3%
• Tomorrow, 07:00: GBP Inflation Rate MoM - Forecast: -0.1%

This commentary is provided for informational purposes only and should not be construed as financial advice. Market conditions can change rapidly, and you should always verify current rates directly with the PWLB or through official channels before making borrowing decisions. Past performance is not indicative of future results.

Until next time, keep your treasury operations as smooth as a well-oiled machine!