Morning Rate Update

Headline

PWLB Rates Slip Slightly as Market Holds Its Breath

Notice Details

PWLB Interest Rate Notice Number 491/25, AM reset at 09:25 on 18 December 2025.

Maturity Rates

• 1y: 4.59% (-2bps)
• 3y: 4.73% (-2bps)
• 5y: 4.93% (-2bps)
• 10y: 5.51% (-2bps)
• 25y: 6.14% (-3bps)
• 50y: 5.90% (-4bps)

Overall, rates have dipped slightly, with the 50-year rate seeing the most significant drop at 4bps. A quiet day in the market, indeed!

Market Context

The current yield curve reflects a slight flattening trend, with all maturities experiencing minor declines. Today, the Bank of England is expected to announce a cut in the official bank rate from 4.0% to 3.8%, a move that could further influence borrowing costs for local authorities. In the news, the Bank of England's monetary policy committee is likely to vote on this rate cut, with a split expected among members, reflecting ongoing concerns about the UK economy. Additionally, the European Central Bank is maintaining its current stance, which may also impact sentiment in the gilt markets. Overall, the market appears to be in a holding pattern as it awaits further economic data and central bank decisions.

Calendar Events

Today’s Releases:

• 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

Remaining Today:

• No significant economic releases scheduled.

This Week Ahead:

• Tomorrow: GBP GfK Consumer Confidence - Forecast: -18
• Tomorrow: GBP Retail Sales MoM - Forecast: 0.00%
• Monday 22nd: GBP Current Account - Forecast: -18.80B
• Monday 22nd: GBP GDP Growth Rate YoY Final - Forecast: 1.3%

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!