PWLB briefing
End of Day Wrap-Up
UK gilt yields rose across the curve today, resulting in higher PWLB rates at all maturities.
GILT MOVE SUMMARY
- → 2y: 4.36% (+3bp) — front-end yields rose moderately.
- → 10y: 4.94% (+1bp) — belly saw a smaller increase.
- → 20y: 5.55% (+4bp) — long-dated yields led the move higher.
- → 50y: 5.18% (+5bp) — largest rise at the ultra-long end.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.22% | +5bp |
| 5y | 5.48% | +5bp |
| 10y | 5.97% | +5bp |
| 25y | 6.57% | +3bp |
| 50y | 6.36% | +3bp |
WHAT DROVE TODAY
The rise in gilt yields coincided with a backdrop of heightened geopolitical risk and firmer UK economic data. UK S&P Global PMIs surprised to the upside: Services PMI came in at 52 (Forecast: 50, Previous: 50.5), Manufacturing PMI at 53.6 (Forecast: 50.3, Previous: 51), and Composite PMI at 52 (Forecast: 49.8, Previous: 50.3), indicating stronger-than-expected private sector activity. News coverage highlighted ongoing tensions in the Middle East, with renewed escalation in the Iran conflict and associated oil price spikes, contributing to a risk premium in global rates markets. No single domestic event was solely responsible, but the combination of robust UK data and persistent geopolitical uncertainty supported higher yields.
WHAT THIS MEANS
- → PWLB rates increased by +3bp to +6bp across the curve, raising borrowing costs for local authorities.
- → The largest moves were seen at the short and ultra-long ends, with the 1y and 50y rates both up by +5bp and +3bp respectively.
- → The upward shift reflects both domestic economic resilience and ongoing global risk factors.
NEXT ON THE DIARY
- → Fri 07:00: Retail Sales (YoY) — Forecast: 1.30% (Prev: 2.50%)
- → Fri 07:00: Core Retail Sales (MoM) — Forecast: 0.20% (Prev: -0.40%)
PWLB borrowing costs ended the day higher, reflecting both firmer UK data and ongoing geopolitical tensions.
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.