End of Day Wrap-Up

UK gilt yields rose sharply across the curve today, resulting in modest upward moves in PWLB rates at most maturities.

GILT MOVE SUMMARY

• 1y: 3.770% (+8bp) — Significant front-end rise.
• 5y: 4.034% (+10bp) — Short and intermediate yields moved in tandem.
• 10y: 4.538% (+10bp) — Belly of the curve saw parallel upward shift.
• 30y: 5.237% (+8bp) — Long end also higher, though slightly less than the belly.

PWLB CLOSE SNAPSHOT

• 1y: 4.65% (unch)
• 5y: 4.95% (unch)
• 10y: 5.51% (+1bp)
• 25y: 6.15% (+1bp)
• 50y: 5.97% (+1bp)

WHAT DROVE TODAY

• No major UK economic data releases with high market impact occurred today. The S&P Global Construction PMI (Actual: 44.5, Forecast: 47, Previous: 46.4) was weaker than expected but is not typically a primary driver for gilts.
• Geopolitical risk dominated market sentiment. Extensive news coverage highlighted the escalation of conflict in the Middle East, with oil prices surging as the Strait of Hormuz faced disruptions. This has raised concerns about inflation and future interest rate paths, as reflected in commentary from both UK and global sources.
• Mortgage and swap rates rose in response to market volatility, with several lenders announcing higher rates amid the crisis, reinforcing the upward move in yields.

WHAT THIS MEANS

• PWLB rates ended modestly higher across most maturities, with +1bp moves in the 2y, 7y, 10y, 15y, 20y, 25y, 30y, 40y, and 50y tenors.
• Shorter maturities (1y, 3y, 5y, 12y) were unchanged, despite larger moves in underlying gilts, reflecting the PWLB’s smoothing mechanism.
• Overall borrowing costs for local authorities increased slightly, particularly for longer-dated funding.

NEXT ON THE DIARY

• Friday 07:00: Halifax House Price Index YoY (Forecast: 1.1%)
• Friday 07:00: Halifax House Price Index MoM (Forecast: -0.1%)

Today’s session saw a clear risk-driven repricing, with geopolitical developments outweighing domestic data and pushing borrowing rates modestly higher.

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.