PWLB briefing
Morning Rate Update
PWLB rates reset sharply lower this morning, with 5–10bp declines across the curve as gilts rally on softer jobs data and easing geopolitical tensions.
⚠ RATE ALERT — AM reset: PWLB rates down 7–10bp across all maturities, driven by softer UK labour data and a pullback in gilt yields.
PWLB rates tumble as jobs data and Iran de-escalation drive gilt rally
PWLB Snapshot
| Tenor | Rate | Chg |
|---|---|---|
| 1y | 5.21% | -7bp |
| 3y | 5.44% | -8bp |
| 5y | 5.61% | -7bp |
| 10y | 6.09% | -8bp |
| 25y | 6.67% | -9bp |
| 50y | 6.45% | -9bp |
Parallel shift lower: 7–10bp cuts across all maturities.
What moved
- → Broad-based rally — All key tenors fell 7–10bp, with the long end (40y: -10bp) leading.
- → No significant curve twist — The move is parallel, not driven by a specific segment.
Context
- → UK jobs data softer than forecast — Unemployment rate rose to 5.0% (forecast: 4.90%, prev: 4.90%), and wage growth slowed to 3.4% ex-bonus (forecast: 3.4%, prev: 3.6%). Payrolls fell by 100k, the largest drop in six years.
- → Gilt yields drop on de-escalation — News of President Trump pausing Iran strikes and hopes for a truce have eased inflation and risk-off pressures, supporting the rally.
- → No major surprises from other macro news — Market focus remains on UK labour and Middle East headlines.
Calendar Events
Today's Releases
- → Unemployment Rate (07:00): Actual 5.0% (Forecast: 4.90%, Prev: 4.90%) — Above forecast, signalling a weaker labour market and supporting the gilt rally.
- → Average Earnings ex Bonus (07:00): Actual 3.4% (Forecast: 3.4%, Prev: 3.6%) — Wage growth continues to slow, reducing inflation pressure.
- → HMRC Payrolls Change (07:00): Actual -100k (Forecast: -26k, Prev: -28k) — Largest drop in payrolls since the pandemic.
Remaining Today
- → 10:10: BoE Breeden Speech (MEDIUM)
Next 48 Hours
- → Wed 20 May 07:00: UK Inflation Rate YoY — Forecast: 3.0%
- → Wed 20 May 19:00: US FOMC Minutes
⚑ Treasurer's Note — The PWLB curve has dropped sharply, with 7–10bp cuts across all maturities at the AM reset. This is a broad-based rally, driven by weaker-than-expected UK jobs data and a swift drop in gilt yields as Iran tensions ease. Long-dated rates are down the most, with 40y off 10bp. If you have live funding needs, this window is materially cheaper than yesterday's.
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 — still here after every "one-off" jobs shock and every "temporary" truce.