Morning Rate Update

Headline

PWLB Rates Take a Gentle Dip: A Calm Before the Storm?

Notice Details

Today's PWLB Interest Rate Notice is number 489/25, with rates reset in the AM at 09:30 on December 17, 2025.

Maturity Rates

• 1y: 4.60% (-6bps)
• 3y: 4.73% (-7bps)
• 5y: 4.93% (-7bps)
• 10y: 5.51% (-6bps)
• 25y: 6.14% (-6bps)
• 50y: 5.91% (-6bps)

Notably, the 3-year and 5-year rates both saw a decrease of 7 basis points, which is a significant move, indicating a slight easing in borrowing costs for those terms.

Market Context

The yield curve appears to be flattening slightly, with shorter maturities experiencing more pronounced declines compared to longer ones. Today’s economic data revealed that the UK inflation rate dropped to 3.2%, below the forecast of 3.4%, which may bolster expectations for a Bank of England rate cut tomorrow. This drop in inflation is a key driver behind the recent rate movements, as it suggests a potential shift in monetary policy. Additionally, the news highlights a general sentiment of easing pressures in the economy, which could further influence gilt yields and PWLB rates. As we await the Bank of England's decision, the market is keenly focused on the implications of these inflation figures.

Calendar Events

Today's Releases:

• GBP Core Inflation Rate YoY - Actual: 3.2% (Forecast: 3.3%, Previous: 3.4%) - This significant drop may influence the BoE's upcoming decisions.
• GBP Inflation Rate MoM - Actual: -0.2% (Forecast: -0.1%, Previous: 0.4%) - A notable decline that adds to the case for potential rate cuts.

Remaining Today:

• 11:00: GBP CBI Industrial Trends Orders - Forecast: -34 (Previous: -37)

This Week Ahead:

• Tomorrow: GBP Official Bank Rate - 12:00 - Forecast: 3.8%
• Tomorrow: GBP MPC Meeting Minutes - 12:00
• Tomorrow: GBP BoE MPC Vote Cut - 12:00 (Previous: 4)
• Tomorrow: GBP BoE MPC Vote Hike - 12:00 (Previous: 0)
• Tomorrow: GBP BoE MPC Vote Unchanged - 12:00 (Previous: 5)

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 hats on and your rates low!