PWLB briefing
End of Day Wrap-Up
UK gilt yields rose sharply across the curve today, driving PWLB rates higher and increasing borrowing costs for local authorities.
GILT MOVE SUMMARY
- → 2y: 4.54% (+12bp) — front-end led the move higher.
- → 5y: 4.56% (+13bp) — short and medium tenors saw the largest increases.
- → 10y: 4.97% (+13bp) — belly of the curve moved in line with shorter maturities.
- → 30y: 5.57% (+12bp) — long-end also rose, maintaining a steep curve.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.31% | +2bp |
| 5y | 5.53% | +5bp |
| 10y | 5.95% | +4bp |
| 25y | 6.50% | +4bp |
| 50y | 6.31% | +4bp |
WHAT DROVE TODAY
- → 30-year Gilt auction: Priced at 5.52% (previous: 5.29%), indicating a significant rise in long-dated funding costs.
- → Geopolitical risk and inflation concerns: News coverage highlighted ongoing Middle East conflict, surging oil prices, and OECD forecasts for higher global inflation, all contributing to upward pressure on yields.
WHAT THIS MEANS
- → PWLB rates increased by +2bp to +5bp across the curve, with the largest moves in 5–7 year maturities.
- → Borrowing costs are now at their highest levels in recent weeks, reflecting the sharp repricing in gilts.
- → The curve remains steep, with long-dated PWLB rates above 6.3%.
NEXT ON THE DIARY
- → Fri 07:00: GBP Retail Sales (YoY) — Forecast: 2.10% (previous: 4.50%)
- → Fri 07:00: GBP Retail Sales (MoM) — Forecast: -0.60% (previous: 1.80%)
Gilt and PWLB rates ended the day materially higher, reflecting market sensitivity to geopolitical and inflation risks.
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.