PWLB briefing
End of Day Wrap-Up
UK gilt yields rose sharply across the curve today, leading to a corresponding increase in PWLB rates and higher borrowing costs for local authorities.
GILT MOVE SUMMARY
- → 2y: 4.459% (+8bp) — front-end led the move higher.
- → 10y: 4.998% (+8bp) — belly followed with similar magnitude.
- → 30y: 5.671% (+9bp) — long end also saw pronounced upward pressure.
- → 50y: 5.223% (+8bp) — gains extended across the ultra-long end.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.26% | +3bp |
| 5y | 5.54% | +3bp |
| 10y | 6.01% | +3bp |
| 25y | 6.61% | +3bp |
| 50y | 6.41% | +3bp |
WHAT DROVE TODAY
- → No significant UK economic data was released today to directly impact gilt yields.
- → News coverage highlighted political uncertainty following Prime Minister Starmer’s “reset” speech, with several sources noting a negative market reaction and rising gilt yields as investors questioned UK political stability.
- → Broader risk sentiment was affected by ongoing geopolitical tensions in the Middle East, particularly the unresolved Iran conflict and its impact on oil prices and inflation expectations.
WHAT THIS MEANS
- → PWLB rates ended the day 2–4bp higher across the curve, reflecting the parallel move in gilts.
- → Borrowing costs for local authorities increased modestly, with the 10y PWLB rate closing at 6.01% (+3bp).
- → The move was broad-based, with no part of the curve insulated from today’s upward pressure.
NEXT ON THE DIARY
- → 00:01 (Tue): GBP BRC Retail Sales Monitor YoY (Forecast: 0.80%)
Today’s session saw a clear repricing higher in UK government borrowing costs, with political and geopolitical factors dominating in the absence of major domestic 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.