PWLB briefing
Morning Rate Update
PWLB rates reset sharply higher this morning, with significant moves across the curve led by the front end as markets react to fresh inflation and geopolitical shocks.
⚠ VOLATILITY ALERT — AM reset: rates up 6–13bp across the curve, front end leading, driven by inflation fears and global bond selloff after oil and energy market turmoil.
PWLB Rates Surge as Oil Shock and Inflation Fears Hit Gilts
PWLB Snapshot
| Tenor | Rate | Chg |
|---|---|---|
| 1y | 5.21% | +13bp |
| 3y | 5.32% | +10bp |
| 5y | 5.43% | +6bp |
| 10y | 5.85% | +1bp |
| 25y | 6.41% | -2bp |
| 50y | 6.21% | -3bp |
Curve twist: sharp front-end rise, long-end down — pronounced bear flattening.
What Moved
- → Front-end surge — 1y up +13bp, 3y +10bp, reflecting acute short-term inflation and funding pressure.
- → Long-end softens — 25y and 50y down 2–3bp, as risk-off flows and curve flattening dominate.
- → Curve inversion intensifies — Short rates now well above long, marking the sharpest flattening since the start of the year.
Context
- → UK public borrowing — PSNB ex Banks for Feb: £14.3bn (forecast: £8.5bn, prev: -£31.9bn); much higher than expected, adding to gilt supply concerns.
- → Oil and energy shock — Middle East conflict has driven oil and gas prices sharply higher, with major supply disruptions and inflation fears dominating global bond markets.
- → Global bond selloff — US and European yields also spiking as markets price in higher-for-longer rates and central bank hawkishness.
Calendar Events
Today's Releases
- → PSNB ex Banks (Feb): £14.3bn (forecast: £8.5bn, prev: -£31.9bn) — much higher than expected, intensifying upward pressure on gilt yields.
- → PSNCR (Feb): £7.6bn (prev: -£59.4bn) — reversal from previous surplus, reinforcing fiscal concerns.
Remaining Today
Nothing further scheduled today.
Next 48 Hours
- → Mon 23 Mar 15:00: EUR Consumer Confidence Flash — Forecast: -12.2
- → Wed 25 Mar 07:00: GBP CPI MM — Previous: -0.5%
⚑ Treasurer's Note — This is a textbook volatility event: PWLB rates have surged at the front end (+13bp 1y, +10bp 3y) while the long end has fallen, flattening the curve dramatically. The move is driven by a combination of much higher-than-expected UK borrowing and global inflation fears after the latest oil shock. If you are monitoring intra-day gilts, expect continued turbulence ahead of the next reset. Take note: the window for locking in pre-reset rates has closed for now.
This commentary is provided for information only and is not financial advice. Please verify rates directly with PWLB or official sources before acting.
Gilt Edge Advisor — still here when the only thing flattening faster than the curve is your coffee.