PWLB briefing

Morning PWLB Predictions

12 May 2026 · 11:30 · By Russell Tew, PWLBtoday

⚠ RATE ALERT — Gilt yields are up sharply across the curve (+8–10bp), with political uncertainty and Middle East tensions driving the move.

Gilt yields are up 8–10bp at all key tenors so far today, pointing to a material upward reset for PWLB rates at 12:30.

GILTS SNAPSHOT

→ 2y: 4.542% (+8bp) — Short end up, reflecting rate and risk repricing.
→ 10y: 5.095% (+9bp) — Belly surges, mirroring broad market sell-off.
→ 30y: 5.766% (+10bp) — Long end at new cycle highs, curve remains steep.

PWLB 12:30 RESET — PREDICTIONS

→ 1y: predicted 5.30% (-4bp) from current
→ 5y: predicted 5.64% (-2bp) from current
→ 10y: predicted 6.12% (-1bp) from current
→ 20y: predicted 6.64% (-2bp) from current
→ 30y: predicted 6.73% (-1bp) from current
→ 50y: predicted 6.50% (-3bp) from current

WHAT'S DRIVING THIS

→ UK political instability — Multiple headlines cite mounting pressure on PM Starmer and speculation over leadership, with markets pricing in higher risk premiums.
→ Middle East conflict — Ongoing Iran war and oil supply disruption are highlighted as drivers of inflation and higher yields.
→ Gilt auction result — 2031 auction cleared at 4.65% (above previous 4.23%), confirming upward pressure on funding costs.
→ Weak retail sales — BRC Retail Sales Monitor -3.40% (vs forecast +0.80%, prev +3.10%), but overshadowed by political and geopolitical headlines.

CALENDAR

RELEASES SO FAR TODAY

→ BRC Retail Sales Monitor YoY — -3.40% vs 0.80% vs 3.10% (Medium) — sharply below forecast, signals weaker consumer demand.
→ Treasury Gilt 2031 Auction — 4.65% vs previous 4.23% (Low) — confirms higher funding costs, in line with market moves.

STILL DUE TODAY

→ 13:30 — USD Core Inflation Rate MoM — Forecast: 0.30% — could influence global rates, but after the PWLB reset.
→ 13:30 — USD Inflation Rate MoM/YoY — Forecast: 0.60%/3.70% — high impact for global markets, but after reset.
→ 18:30 — GBP BoE Woods Speech — (Low) — not expected to move gilts.

NEXT 48 HOURS

→ Thu 07:00 — GBP GDP Growth Rate YoY Prel — Forecast: 0.80%
→ Thu 07:00 — GBP GDP MoM — Forecast: -0.20%
→ Thu 07:00 — GBP GDP Growth Rate QoQ Prel — Forecast: 0.60%

A volatile morning for gilts, with political headlines and Middle East risks firmly in the driving seat; expect a marked upward reset at 12:30.

This commentary is provided for information only and is not financial advice. Please verify rates directly with PWLB or official sources before acting.

Gilt Edge Advisor — If you’re reading this before your second coffee, you’re not alone.