End of Day Wrap-Up

Gilt yields rose across the curve today, with the front end leading, resulting in modest increases in most PWLB rates, though longer-dated PWLB rates ended slightly lower.

GILT MOVE SUMMARY

• → 1y: 4.21% (+7bp) — front-end led gains.
• → 5y: 4.37% (+6bp) — short maturities outperformed the belly.
• → 10y: 4.88% (+7bp) — belly followed front-end higher.
• → 30y: 5.59% (+2bp) — long end rose less, slight flattening.

PWLB CLOSE SNAPSHOT

WHAT DROVE TODAY

• → Stronger-than-expected US retail sales (Actual: +1.7% vs Forecast: +1.4%) and core retail sales (Actual: +1.9% vs Forecast: +1.4%) contributed to global yield pressure, with commentary highlighting the impact of higher gasoline prices and persistent inflation concerns.
• → UK labour market data was mixed: unemployment fell to 4.9% (Forecast: 5.2%), but wage growth remained above expectations (Average Earnings Index +Bonus: 3.8% vs Forecast: 3.6%), providing little relief on domestic inflation worries.
• → News flow focused on inflation risks from higher fuel prices and ongoing Middle East tensions, but no single UK-specific event dominated gilt moves.

WHAT THIS MEANS

• → PWLB rates for short and medium maturities ended modestly higher, reflecting the upward move in gilt yields.
• → Long-dated PWLB rates finished lower, as the long end of the gilt curve lagged the front-end rise.
• → The overall curve flattened, with borrowing costs diverging by maturity.

NEXT ON THE DIARY

• → Wed 07:00: GBP PPI Input (MoM) (MEDIUM) — Forecast: +2.8%
• → Wed 07:00: GBP CPI (YoY) (HIGH) — Forecast: 3.3%
• → Wed 07:00: GBP CPI (MoM) (MEDIUM) — Forecast: +0.6%

Borrowing conditions saw a modest shift today, with short and medium-term costs up and long-term rates slightly lower, ahead of tomorrow’s key UK inflation data.

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.