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 down by 2bps to 3.571%, reflecting a risk-off sentiment following today’s economic data. The 10Y yield remains unchanged at 4.477%, while the 30Y yield has decreased by 1bp to 5.281%. The recent economic releases, particularly the 0.1% GDP growth for the final quarter of 2025, have contributed to this cautious market sentiment, as investors weigh the implications for future monetary policy.

PWLB Reset Predictions

• 1y: predicted 4.53% (0bp from current)
• 5y: predicted 4.95% (+1bp from current)
• 10y: predicted 5.55% (0bp from current)
• 20y: predicted 6.13% (0bp from current)
• 30y: predicted 6.23% (0bp from current)
• 50y: predicted 6.03% (0bp from current)

Context

The predictions reflect the stability in gilt yields, influenced by the recent economic data releases, particularly the GDP figures, which suggest a slow growth trajectory for the UK economy.

Calendar Events

Releases So Far Today

• GBP GDP MoM - Actual: 0.1%, Forecast: 0.1%, Previous: 0.2% (HIGH impact) - This release is crucial as it indicates the overall economic growth, impacting investor sentiment towards gilts.
• GBP Industrial Production MoM - Actual: -0.9%, Forecast: -0.2%, Previous: 1.3% (MED impact) - A significant miss on expectations, suggesting potential weakness in the manufacturing sector, which may affect gilt yields.

Remaining Today

• None scheduled for the remainder of today.

This Week Ahead

• Tuesday 07:00 - GBP Unemployment Rate (HIGH impact) - Forecast: 5.1%
• Tuesday 07:00 - GBP Average Earnings excl. Bonus (LOW impact) - Forecast: 4.4%

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!