PWLB briefing
End of Day Wrap-Up
UK gilt yields rose sharply across the curve today, driving a modest decline in PWLB rates at the afternoon fixing despite the underlying market move.
GILT MOVE SUMMARY
- → 2y: 4.532% (+7bp) — front-end yields rose, but less than the belly and long end.
- → 10y: 5.100% (+10bp) — belly led the move higher.
- → 30y: 5.764% (+9bp) — long end also saw significant upward pressure.
- → 50y: 5.298% (+7bp) — gains extended across the ultra-long end.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.32% | -2bp |
| 5y | 5.65% | -1bp |
| 10y | 6.12% | -1bp |
| 25y | 6.71% | -1bp |
| 50y | 6.51% | -2bp |
PWLB rates ended the day slightly lower across the curve, reflecting the timing of the official reset versus intraday gilt volatility.
WHAT DROVE TODAY
The sharp rise in gilt yields was driven by a combination of domestic and international factors. The US April CPI release at 13:30 showed inflation running hotter than expected (YoY actual: 3.8% vs forecast: 3.7%, previous: 3.3%; Core YoY: 2.8% vs forecast: 2.7%, previous: 2.6%), reinforcing concerns about persistent inflation and the potential for higher-for-longer global rates. Additionally, UK political instability intensified, with reports of deepening crisis in Westminster and the Prime Minister facing calls to resign, which contributed to market volatility. News commentary also highlighted stagflation fears, surging oil prices, and the UK 30-year gilt yield reaching levels last seen in 1998. The UK 2031 gilt auction cleared at a notably higher yield (4.65% vs previous 4.23%), underlining the upward pressure on funding costs.
WHAT THIS MEANS
- → Gilt yields rose 7–11bp across the curve, but PWLB rates ended 1–2bp lower due to the timing of the official reset.
- → Despite significant market volatility, local authority borrowing costs via PWLB finished the day marginally lower.
- → The underlying trend in market yields points to ongoing sensitivity to inflation data and political developments.
NEXT ON THE DIARY
- → Tomorrow 15:00: BoE L Mann Speech (LOW)
- → Thursday 00:01: RICS House Price Balance (MEDIUM) — forecast: -25%
- → Thursday 07:00: GDP Growth Rate YoY Prel (HIGH) — forecast: 0.80%
Markets remain focused on inflation data and domestic political risk as key drivers of funding conditions.
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.