Morning PWLB Predictions

Dear Local Authority Treasury Officers,

Market Overview

Headline

1Y Gilt Yield Drops 15bps: PWLB Predictions Reflect Volatility!

Gilt Market Analysis

The gilt market has experienced notable movements this morning, with the 1-year yield falling by 15bps to 3.720%. The 5-year yield decreased by 3bps to 3.890%, while the 10-year yield also saw a 3bps drop, settling at 4.446%. This volatility is primarily driven by expectations surrounding the Bank of England's upcoming interest rate decision, with market sentiment leaning towards a risk-off approach as investors await further economic data.

PWLB Reset Predictions

• 1y: predicted 4.58% (-1bp from current)
• 5y: predicted 4.93% (0bp from current)
• 10y: predicted 5.50% (-1bp from current)
• 20y: predicted 6.05% (-1bp from current)
• 30y: predicted 6.15% (-1bp from current)
• 50y: predicted 5.89% (-1bp from current)

Context

The predictions reflect the recent movements in gilt yields, influenced by the anticipation of the Bank of England's monetary policy decisions and the broader economic outlook. The market is particularly focused on the potential interest rate cut, which could impact borrowing costs for local authorities.

Calendar Events

Releases so far today

• None reported so far.

Remaining today

• 12:00: GBP Official Bank Rate - Forecast: 3.8% (Previous: 4.0%)
• 12:00: GBP MPC Meeting Minutes
• 12:00: GBP BoE MPC Vote Cut - Previous: 4
• 12:00: GBP BoE MPC Vote Hike - Previous: 0
• 12:00: GBP BoE MPC Vote Unchanged - Previous: 5

This week ahead

• Tomorrow 00:01: GBP GfK Consumer Confidence - Forecast: -18
• Tomorrow 07:00: GBP Retail Sales MoM - Forecast: 0.4%

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.

Stay informed and keep your treasury operations running smoothly!