End of Day Wrap-Up

UK gilt yields rose sharply across the curve today, with the front end leading, while PWLB rates finished lower across all maturities.

GILT MOVE SUMMARY

• 1y: 3.895% (+13bp) — Significant front-end selloff
• 5y: 4.181% (+6bp) — Short-dated yields rose notably
• 10y: 4.649% (+5bp) — Belly higher, but less than front end
• 30y: 5.307% (-1bp) — Long end stable to marginally lower

PWLB CLOSE SNAPSHOT

• 1y: 4.95% (-5bp)
• 5y: 5.28% (-3bp)
• 10y: 5.75% (-4bp)
• 25y: 6.33% (-1bp)
• 50y: 6.14% (-1bp)

WHAT DROVE TODAY

• No UK economic data was released today.
• News flow was dominated by the escalation of the Iran conflict and a surge in oil prices above $100/barrel. Multiple sources highlighted market concerns over inflation and the potential for central banks, including the Bank of England, to delay or reverse rate-cut expectations. Commentary specifically noted that UK government bonds were particularly sensitive to these inflation fears.
• Global risk aversion and energy market volatility contributed to sharp moves in short gilts, while long-end yields were more stable, possibly reflecting demand for duration amid uncertainty.

WHAT THIS MEANS

• PWLB rates ended lower across all maturities despite higher gilt yields, with the largest declines at the short end.
• Borrowing costs for local authorities fell modestly today, especially for short and medium tenors.
• Long-term rates were little changed, reflecting relative stability at the long end of the gilt curve.

NEXT ON THE DIARY

• Tomorrow 00:01: GBP BRC Retail Sales Monitor YoY (MED impact) — Forecast: 1.1% (Prev: 2.3%)

Markets responded to geopolitical and inflation risks today, with borrowing costs easing despite volatility in underlying gilts.

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.