End of Day Wrap-Up

UK gilt yields declined across the curve today, leading to a modest fall in underlying funding costs, though PWLB rates ended slightly higher due to the timing of the rate setting versus the market close.

GILT MOVE SUMMARY

• → 2y: 4.32% (-5bp) — front-end led declines.
• → 10y: 4.90% (-5bp) — belly followed the move lower.
• → 30y: 5.56% (-6bp) — long end also saw notable declines.

PWLB CLOSE SNAPSHOT

PWLB rates ended modestly higher despite the underlying gilt rally, reflecting the timing of the rate setting versus the market close.

WHAT DROVE TODAY

• → UK April retail sales missed expectations (MoM: -1.30% actual vs -0.60% forecast; YoY: 0.0% vs 1.30% forecast), with the largest drop in petrol purchases in six years weighing on the data.
• → News flow highlighted weak consumer sentiment and higher-than-expected public sector borrowing (£24.3bn in April), but no single dominant driver for the gilt rally was evident.

WHAT THIS MEANS

• → Underlying gilt yields fell by (-5bp) to (-6bp) across the curve, indicating improved market conditions for borrowers.
• → PWLB rates, however, ended the day up (+1bp) across most maturities due to the rate setting timing, not market direction.
• → The net effect is that actual borrowing costs via PWLB were little changed to marginally higher, despite the underlying rally in gilts.

NEXT ON THE DIARY

• → Monday 25 May: GBP Spring Bank Holiday (LOW) — no major releases.
• → Tuesday 26 May 00:01: GBP BRC Shop Price Inflation (LOW) — Forecast: 2.20% (Prev: 1.0%)
• → Tuesday 26 May 11:00: GBP CBI Distributive Trades (MEDIUM) — Forecast: -60 (Prev: -68)

Please refer to official sources for the latest PWLB rates and market developments.

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.