PWLB briefing
End of Day Wrap-Up
UK gilt yields declined across the curve today, leading to a parallel fall in PWLB rates and slightly easing borrowing costs for local authorities.
GILT MOVE SUMMARY
| Tenor | Yield | Change |
|---|---|---|
| 2y | 4.376% | unch |
| 5y | 4.456% | -3bp |
| 10y | 4.909% | -3bp |
| 30y | 5.574% | -6bp |
| 50y | 5.140% | -5bp |
Declines were most pronounced at the long end, with the 30y and 50y tenors falling (-6bp) and (-5bp) respectively, while the short end was more stable.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.18% | -2bp |
| 5y | 5.45% | -3bp |
| 10y | 5.91% | -4bp |
| 25y | 6.51% | -4bp |
| 50y | 6.30% | -5bp |
WHAT DROVE TODAY
- → Political stability — News reports highlighted that UK government borrowing costs eased as markets were reassured by Prime Minister Starmer's commitment to remain in office following local election losses.
- → No major UK data — Domestic economic releases were limited, with only the Halifax House Price Index (YoY: 0.40%, Forecast: 0.60%, Previous: 0.80%) and BBA Mortgage Rate (Actual: 6.60%, Forecast: 6.70%) offering little market impact.
- → Global context — Internationally, US jobs data (Non-Farm Payrolls Actual: 115,000 vs Forecast: 55,000) and ongoing Middle East tensions dominated headlines, but UK gilts outperformed other G7 bonds, suggesting a domestic political influence was more significant.
WHAT THIS MEANS
- → PWLB rates fell across all maturities — Reductions ranged from (-2bp) at the short end to (-5bp) at the long end.
- → Longer-dated borrowing saw the largest moves — 30y and 50y PWLB rates both dropped (-5bp), modestly improving conditions for long-term funding.
- → Overall borrowing costs remain elevated — Despite today's declines, absolute rate levels are still high by recent standards.
NEXT ON THE DIARY
- → Monday 07:00 — No high or medium impact GBP data scheduled.
- → Tuesday 00:01 — BRC Retail Sales Monitor YoY (Forecast: 0.30%).
PWLB rates ended the week lower, reflecting a modest improvement in local authority borrowing conditions as political developments reassured markets.
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.