Morning PWLB Predictions

Headline

Gilt Yields Dip as 1Y Sees Notable Drop, PWLB Predictions Hold Steady

Gilt Market Analysis

The gilt market is experiencing mixed movements this morning, with the 1Y yield decreasing by 1bp to 3.579%, reflecting a risk-off sentiment among investors. Meanwhile, the 10Y yield remains unchanged at 4.419%, indicating stability in the belly of the curve. In the longer tenors, the 30Y yield has increased by 1bp to 5.166%, driven by ongoing concerns over inflation and economic growth. The overall market sentiment appears cautious, influenced by recent economic data releases.

PWLB Reset Predictions

• 1y: predicted 4.54% (0bp from current)
• 5y: predicted 4.90% (0bp from current)
• 10y: predicted 5.47% (0bp from current)
• 20y: predicted 6.03% (0bp from current)
• 30y: predicted 6.11% (0bp from current)
• 50y: predicted 5.87% (0bp from current)

Context

The predictions reflect the current stability in gilt yields, as economic data releases have shown mixed results, contributing to a cautious outlook among investors.

Calendar Events

Releases so far today

• GBP Halifax House Price Index MoM - Actual: -0.6%, Forecast: 0.1%, Previous: -0.1% (MED impact) - This release indicates a decline in house prices, which may affect consumer confidence and subsequently influence gilt yields.
• GBP Halifax House Price Index - Actual: 0.3%, Forecast: 1.0%, Previous: 0.6% (MED impact) - The lower than expected index suggests ongoing pressure in the housing market, impacting economic sentiment.

Remaining today

• No scheduled releases for the remainder of today.

This week ahead

• Tuesday 00:01 (2026-01-13): GBP BRC Retail Sales Monitor YoY (Forecast: 0.9%)
• Tuesday 10:00 (2026-01-13): GBP Index-linked Treasury Gilt 2035 Auction
• Wednesday 10:00 (2026-01-14): GBP Treasury Gilt 2035 Auction
• Thursday 00:01 (2026-01-15): GBP RICS House Price Balance (Forecast: -0.16)
• Thursday 07:00 (2026-01-15): GBP Balance of Trade (Forecast: -3.50B)
• Thursday 07:00 (2026-01-15): GBP GDP MoM (Forecast: -0.1%)
• Thursday 07:00 (2026-01-15): GBP GDP 3-Month Avg (Forecast: -0.1%)
• Thursday 07:00 (2026-01-15): GBP GDP YoY (Forecast: 0.8%)
• Thursday 07:00 (2026-01-15): GBP Industrial Production MoM (Forecast: 1.0%)
• Thursday 07:00 (2026-01-15): GBP Goods Trade Balance (Forecast: -19.80B)

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.

Wishing you a productive day ahead in treasury management!