PWLB briefing
End of Day Wrap-Up
UK gilt yields rose sharply across the curve today, lifting PWLB rates to new cycle highs and further tightening borrowing conditions for local authorities.
GILT MOVE SUMMARY
- → 2y: 4.47% (+8bp) — front-end led the move higher.
- → 5y: 4.70% (+9bp) — significant upward shift in the short-to-intermediate sector.
- → 10y: 5.14% (+8bp) — belly of the curve also sharply higher.
- → 30y: 5.85% (+7bp) — long-end yields at multi-year highs.
PWLB CLOSE SNAPSHOT
| Tenor | Rate | Change |
|---|---|---|
| 1y | 5.28% | +1bp |
| 5y | 5.73% | +2bp |
| 10y | 6.21% | +1bp |
| 25y | 6.81% | unch |
| 50y | 6.61% | +1bp |
WHAT DROVE TODAY
- → Sticky inflation concerns dominated, with Eurozone CPI coming in at 3.30% YoY (Actual vs Forecast: 3.30%, Previous: 2.90%), reinforcing market worries about persistent price pressures.
- → News flow highlighted a global bond selloff, driven by surging oil prices and renewed Middle East tensions, which fuelled expectations of higher-for-longer interest rates.
- → No major UK-specific data releases today materially altered the market direction.
WHAT THIS MEANS
- → PWLB rates closed at or near new cycle highs across most maturities, reflecting the sharp upward move in gilts.
- → Borrowing costs for local authorities increased further, with the 5y and 10y tenors seeing the largest daily rises.
- → The yield curve remains steep, with long-dated rates at multi-year highs.
NEXT ON THE DIARY
- → Thursday 09:30: GBP S&P Global Composite PMI Final (LOW) — Forecast: 52.5
- → Thursday 09:30: GBP S&P Global Services PMI Final (LOW) — Forecast: 52.8
- → No high or medium-impact GBP data scheduled for Wednesday.
Markets remain focused on global inflation and rate expectations, with local authority borrowing costs now at their highest levels in years.
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.