PWLB briefing
Weekly Wrap-Up
Week in Review — 16 to 20 March 2026
| Maturity | Mon Open | Fri Close | Change |
|---|---|---|---|
| 1y | 4.92% | 5.33% | +41bp |
| 2y | 5.05% | 5.41% | +36bp |
| 5y | 5.50% | 5.67% | +17bp |
| 10y | 6.01% | 6.11% | +10bp |
| 15y | 6.25% | 6.33% | +8bp |
| 20y | 6.37% | 6.43% | +6bp |
| 25y | 6.41% | 6.46% | +5bp |
| 30y | 6.43% | 6.47% | +4bp |
| 40y | 6.41% | 6.45% | +4bp |
| 50y | 6.22% | 6.27% | +5bp |
Friday figures reflect the 12:10 PM reset only. Gilts sold off a further 11–15bp into the close. Monday AM reset will open materially higher — expect 1y ~5.50%+, 10y ~6.05–6.10%.
What Happened — Day by Day
- →Mon 16 Mar — Partial Hormuz resumption gives brief relief; AM spike unwound by PM — the week opened with PWLB 3–4bp above Friday's close as the weekend's Kharg Island strikes embedded in the Monday AM reset. Reports of partial Hormuz shipping resumption and Iraq export recovery eased energy fears through the session. By the PM reset rates had given back the morning's gains. A market in two-way tension between inflation and growth risk, with no direction conviction ahead of the Fed.
- →Tue 17 Mar — Pre-Fed paralysis; diary empty, rates hold flat — the quietest session of the week. Both AM and PM resets came in within 1bp of each other, reflecting a market in complete holding pattern ahead of Wednesday's Fed decision. No UK data, no market-moving headlines.
- →Wed 18 Mar — The week's false dawn: Fed holds with one cut in dot plot, PWLB drops 6–7bp — the best session of the week for borrowers. The Fed held at 3.75% and the dot plot retained one cut for 2026. Combined with continued partial Hormuz resumption, gilts rallied sharply. Wednesday's AM reset at 10y 5.86% was the best PWLB level of the entire conflict period. By midday the US PPI beat (0.7% vs 0.3% forecast) and Brent back above $110 reasserted the inflationary narrative. The PM reset bore the mark of that reversal — but the day still closed as the week's low point for rates.
- →Thu 19 Mar — Ras Laffan strikes overnight; BoE unanimous hawkish hold; two monster resets — overnight Iranian missile strikes on Qatar's Ras Laffan LNG hub triggered the single largest PWLB repricing of the conflict period. The AM reset delivered +13–18bp across the curve with 3y at +18bp. UK gas prices surged 25–35% on the day. Then at 12:00, the BoE held unanimously 9-0 — the expected two dovish votes had disappeared — and explicitly dropped forward guidance on rate cuts. Wednesday's improvement was fully erased in a single session.
- →Fri 20 Mar — PSNB fiscal shock, global bond rout, 10y gilt approaches 5% — the week ended with a further acceleration. PSNB for February printed £14.3bn against an £8.7bn forecast — nearly double — adding domestic gilt supply pressure on top of the energy shock. The AM reset added another +13bp at the front end. By the afternoon, traders were pricing a greater than 50% probability of a US Fed rate hike. Gilt yields closed at their highest since the financial crisis: 1y 4.507%, 10y 4.991%, 30y 5.569%. The PWLB PM reset at 12:10 does not capture any of this afternoon move — it carries into Monday.
The Intraweek Picture — Volatility and Curve
- →The week's range: 1y from 4.86% to 5.33% — a 47bp intraweek spread — Wednesday's AM reset at 4.86% and Friday's PM reset at 5.33% define the extremes. The 10y ranged from 5.86% to 6.11% — 25bp within five days. Wednesday's window was genuinely the best entry point since the conflict began and lasted less than 24 hours before Thursday overnight events destroyed it.
- →Extreme bear flattening — the curve structure has changed — the week-on-week differential between 1y (+41bp) and 50y (+5bp) is 36bp. Short-dated fixed PWLB has become dramatically more expensive relative to long-dated in a single week. The 1y rate (5.33%) is now approaching the 5y rate (5.67%) — a near-inversion not seen in the PWLB context in living memory.
- →BoE policy shift is structural, not tactical — the unanimous hold with dropped cut guidance is the single most important domestic policy development of the conflict period. With Fed hike probability now above 50%, the BoE faces a market that is beginning to price tightening. This is the regime change that alters MTFS assumptions at the most fundamental level.
Week Ahead — Key Risk Events
- →Mon AM reset — the most important reset of the conflict period — will capture Friday's full gilt close plus any weekend geopolitical developments. Expected to open around 1y 5.50%+ and 10y 6.05–6.10%. The 10y breaching 6.00% for the first time since 2008 is the threshold to watch.
- →Wed 25 Mar — UK CPI MoM (high impact) — the first major domestic data release of the week. February CPI will be the first inflation print since the energy shock began to feed through. A higher-than-expected reading would confirm the BoE's decision to drop cut guidance and could push the market toward pricing a hike. A miss would provide modest relief but is unlikely to change the structural picture.
- →Geopolitical newsflow — the overriding variable — any development on Ras Laffan damage assessment, Hormuz transit, or ceasefire signals could move Monday's gilt open materially in either direction over the weekend. The conflict is now in its fourth week with no resolution in sight.
Treasurer's Note
This week represents the most severe deterioration in local authority borrowing conditions since the financial crisis. The key facts as of Friday close: 1y PWLB is 5.33% and likely to open above 5.50% on Monday. 10y PWLB is 6.11% and likely to open above 6.05% on Monday — potentially breaching 6.00% for the first time since 2008. The BoE has removed cut guidance unanimously. The Fed is being priced for a hike by more than half the market. UK public borrowing has surged beyond forecast. And the conflict has escalated to encompass not just oil but LNG infrastructure, with direct implications for UK domestic energy prices and inflation well into 2026 and 2027. Three things matter above all others next week. First, Monday's AM reset — the operative level for all borrowing decisions to follow. Second, Wednesday's CPI — if inflation is already accelerating before the energy shock fully feeds through, the case for a BoE hike becomes very difficult to dismiss. Third, any Hormuz or Ras Laffan development — the only exogenous event capable of reversing the rate trajectory materially. For authorities reviewing MTFS assumptions: the borrowing cost environment has structurally repriced. Any plan built on pre-conflict assumptions needs to be revisited as a matter of urgency. The curve structure has also shifted fundamentally — short-dated borrowing is now near parity with medium-dated, which changes the relative value calculus entirely.
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.