Morning PWLB Predictions

Gilt Market Update: Yields Drop as 1Y Leads the Way

The gilt market is experiencing a notable decline in yields this morning, with the 1-year yield down by 4bps to 3.535%. This movement is part of a broader trend, as yields across various tenors have decreased, reflecting a risk-off sentiment in the market.

Specifically, the 10-year yield has fallen by 4bps to 4.523%, while the 30-year yield is down 4bps to 5.335%. The recent Halifax House Price Index data, showing a month-on-month increase of 0.7% against a forecast of 0.4%, has contributed to market volatility, as it indicates resilience in the housing market.

PWLB Reset Predictions

• 1y: predicted 4.51% (-1bp from current)
• 5y: predicted 4.97% (-1bp from current)
• 10y: predicted 5.60% (-2bp from current)
• 20y: predicted 6.19% (-2bp from current)
• 30y: predicted 6.28% (-3bp from current)
• 50y: predicted 6.09% (-2bp from current)

The predictions reflect the downward movement in gilt yields, driven by the recent economic data and the overall market sentiment leaning towards caution.

Calendar Events

Releases So Far Today

• Halifax House Price Index: Actual 1.0%, Forecast 0.0%, Previous 0.4% (MED impact) - Indicates stronger housing market resilience, which can influence gilt yields.
• Halifax House Price Index MoM: Actual 0.7%, Forecast 0.4%, Previous -0.5% (MED impact) - A positive surprise that may affect market expectations.
• BBA Mortgage Rate: Actual 6.6%, Forecast 6.7%, Previous 6.8% (LOW impact) - Slightly lower rates may support housing activity.

Remaining Today

• No further releases scheduled for today.

This Week Ahead

• Tuesday 00:01 (2026-02-10): GBP BRC Retail Sales Monitor YoY (Forecast: 1.3%)
• Tuesday 10:00 (2026-02-10): GBP Treasury Gilt 2031 Auction (Previous: 4.0%)
• Thursday 00:01 (2026-02-12): GBP RICS House Price Balance (Forecast: -0.12)
• Thursday 07:00 (2026-02-12): GBP Balance of Trade (Forecast: -6B)
• Thursday 07:00 (2026-02-12): GBP Industrial Production MoM (Forecast: -0.2%)
• Thursday 07:00 (2026-02-12): GBP GDP MoM (Forecast: 0.1%)
• Thursday 07:00 (2026-02-12): GBP Manufacturing Production MoM (Forecast: -0.3%)
• Thursday 07:00 (2026-02-12): GBP GDP 3-Month Avg (Forecast: 0.2%)
• Thursday 07:00 (2026-02-12): GBP GDP Growth Rate QoQ Prel (Forecast: 0.2%)

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 sharp and keep your treasury operations running smoothly!