End of Day Wrap-Up

UK gilt yields rose sharply across the curve today, leading to modest increases in most PWLB maturity rates by the afternoon reset.

GILT MOVE SUMMARY

• → 2y: 4.36% (+5bp) — front-end yields rose, but less than the long end.
• → 10y: 4.93% (+7bp) — belly led the move higher.
• → 30y: 5.61% (+7bp) — long-dated yields matched the belly's rise.
• → 50y: 5.17% (+7bp) — ultra-long yields also up in line with the curve.

PWLB CLOSE SNAPSHOT

• → 1y: 5.14% (–1bp)
• → 5y: 5.48% (+1bp)
• → 10y: 5.94% (+1bp)
• → 25y: 6.54% (+1bp)
• → 50y: 6.33% (+1bp)

WHAT DROVE TODAY

The move higher in gilt yields was broad-based and most pronounced from the 5y point out. The main drivers were:

• → Geopolitical tensions: News of escalating US-Iran hostilities and a third consecutive rise in oil prices (WTI up nearly 10% in three days) contributed to higher global yields as inflation concerns intensified.
• → UK data: S&P Global Services PMI Final came in at 49.3 (Forecast: 47.9, Previous: 52.7), and Composite PMI at 49.7 (Forecast: 48.5, Previous: 52.6), both below the 50 threshold, indicating contraction but not as weak as expected.

WHAT THIS MEANS

• → PWLB rates: Afternoon rates rose by +1bp across most maturities, reflecting the gilt market's upward move.
• → Borrowing costs: Local authority borrowing costs are marginally higher at the close, especially for medium and long-dated tenors.
• → Curve shape: The rise was relatively uniform from the 5y to 50y area, with the short end less affected.

NEXT ON THE DIARY

• → Thu 09:30: S&P Global Construction PMI (Forecast: 40.4)
• → Thu 16:40: BoE Governor Bailey speech

PWLB rates ended the day modestly higher, tracking the broad-based rise in gilt yields amid renewed geopolitical and inflation concerns.

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.