PWLB briefing
End of Day Wrap-Up
UK gilt yields rose sharply across the curve today, driving PWLB rates to their highest levels since the financial crisis.
GILT MOVE SUMMARY
- → 1y: 4.507% (+15bp) — front-end led the move higher.
- → 5y: 4.587% (+11bp) — significant upward shift in short and intermediate maturities.
- → 10y: 4.991% (+12bp) — belly of the curve also saw pronounced increases.
- → 30y: 5.569% (+11bp) — long end followed, with double-digit gains.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.33% | +12bp |
| 5y | 5.52% | +9bp |
| 10y | 5.92% | +7bp |
| 25y | 6.46% | +5bp |
| 50y | 6.27% | +6bp |
WHAT DROVE TODAY
- → Middle East conflict and energy shock — News flow was dominated by the Iran war, with the closure of the Strait of Hormuz and attacks on energy infrastructure driving oil above $108 and UK gas to multi-year highs. This triggered a global repricing of inflation and rate expectations.
- → Market repricing of central bank policy — Commentary highlighted a sharp swing in expectations, with traders now seeing a greater than 50% chance of a US Fed rate hike and the Bank of England’s communication under scrutiny for contributing to the bond selloff.
- → UK data — Today’s public sector net borrowing (Actual: £14.3B vs Forecast: £8.7B) was higher than expected, but market reaction was dominated by global factors.
WHAT THIS MEANS
- → PWLB rates rose by +5bp to +12bp across the curve, with the largest increases at the short end.
- → Borrowing costs are now at post-2008 highs, reflecting the global inflation and risk premium shock.
- → The move was broad-based, with no segment of the curve spared from the repricing.
NEXT ON THE DIARY
- → Tonight 20:30 — CFTC GBP speculative net positions (MEDIUM)
- → Tomorrow 14:30 — Fed Chair Powell Speaks (HIGH, USD)
Today’s moves mark a significant tightening in local authority borrowing conditions, with global energy and policy shocks driving rates to new cycle highs.
This commentary is for information only and does not constitute financial advice. Always verify rates directly with PWLB or official sources before making borrowing decisions.